When a child turns 18, their legal status changes from minor to major under Indian regulations, triggering important operational changes across their financial accounts. According to reports from The Economic Times, the accumulated investments remain in place but require updated documentation to reflect the new adult status. Banks typically require both the parent and newly minted adult to visit the branch together, where they must submit fresh KYC documentation including updated Aadhaar cards and PAN cards reflecting their adult status. The account is then officially upgraded to a standard adult Resident Savings Account.
Minor savings accounts, which can be operated solely by guardians or jointly with minors depending on the bank and child's age, lose their minor classification once the account holder turns 18. As reported by The Economic Times, the child must now operate the account independently, requiring signature updates to official adult signatures that the bank records. The RBI allows children above 10 years to operate accounts independently, with the child signing their own cheques and receiving a personalized debit card printed with their name. Banks typically require updated KYC documentation to transfer operational rights, with the deposit continuing until maturity on the original terms.
Fixed deposits for minors, which are opened in the child's name with guardian control, maintain ownership with the child even after turning 18. According to The Economic Times, the investment continues to belong to the child, but operational control shifts from the guardian to the now-adult account holder. Banks typically require updated KYC documentation to transfer operational rights, with the deposit continuing until maturity on the original terms.
Mutual funds invested in a minor's name with guardian management face significant operational changes at 18. As reported by The Economic Times, the guardian's authority over the folio ends automatically, preventing parents from buying, redeeming, or switching units on behalf of the child. All active systematic transactions including SIPs, STPs, and SWPs are put on hold until the account is updated to reflect major status. The RBI divides minor accounts into two distinct categories based on age and psychological maturity, with accounts for children as young as 7 years old functioning as joint accounts where parents must operate on behalf of the child.
Once a child becomes an adult, they gain full rights to manage their own investments independently. According to The Economic Times, ensuring proper account updates allows them to access funds without administrative delays for higher education, career launching, or other financial priorities. The RBI allows children above 10 years to operate accounts independently, with the child receiving their own net banking login ID and having the ability to sign their own cheques. However, on the exact day the child turns 18, the bank automatically freezes all withdrawals from the account until the 18-year-old visits the home branch, submits their own PAN card and Aadhaar card, and provides a fresh specimen signature to unlock the money.
