In a significant move towards financial independence for minors, the Reserve Bank of India has revised the RBI rules allowing children aged 10 years and above to open and operate their savings and fixed deposit accounts. Until now, such accounts were typically operated by parents or legal guardians.
Under the new guidelines, banks can now permit minors aged 10 or older to independently manage their accounts. However, each bank will retain the discretion to define specific terms under its internal risk management policies. These could include setting transaction limits for deposits and withdrawals, regulating access to ATM cards, debit cards, internet banking, and cheque books.
Policy Overhaul by July 2025
RBI instructed all banks to revise their operation policies or make existing policies suitable for adherence by July 1, 2025. Previously, children could have savings or fixed deposit accounts in their name but only with the help of their parents; it was the parents or guardians who could use these accounts.
Key Changes:
- Self-Operation by Minors: Children aged 10 and above can now operate their accounts without needing parental assistance.
- Bank-Specific Conditions: Banks will set limits for how much money can be deposited, withdrawn at once, and the facilities extended.
- New Signatures at 18: Upon turning 18, account holders must provide fresh signatures to the bank, and accounts previously operated by guardians will be formally transitioned.
- Internet Banking and Debit Card Access: Subject to risk assessment, banks may offer internet banking, ATM, and debit card services to minor-operated accounts.
RBI Rules: Current Practice vs New Practice
Beforehand, even though the account may have been kept in the child’s name, it was really done by the guardian or the parent. This latest step empowering the children introduces financial literacy to the young with oversight.
Banks like SBI and HDFC have already been offering specialised children’s accounts such as SBI’s Pehla Kadam and HDFC’s Kids Advantage Account, that allow limited self-operation for minors aged 10 years and above. The new RBI mandate standardises such practices across the banking sector.
In Parallel: ATM Withdrawal Charges Revised
Separately, starting May 1, 2025, customers exceeding their free ATM transaction limits will now incur a charge of ₹19 per transaction, up from the earlier ₹17, following an earlier RBI directive to increase fees.
Also Read: Can You Start Your Own Bank in India?
