Bank Account for Minor: Rules for Age 10+ Independent Operation, Guardian and Tax

“My daughter is 11. Can she have her own debit card, or does everything have to go through me?” We hear versions of this question every school term. Since 1 July 2025, RBI’s rules give a clear answer. A bank account for minor children aged 10 and above can be opened and operated by the child independently, within limits the bank sets. Younger children’s accounts are run through a guardian, and the mother can act as guardian.

These instructions now sit in RBI’s (Commercial Banks – Responsible Business Conduct) Directions, 2025 (RBI/DOR/2025-26/170, DOR.MCS.REC.No.89/01-01-032/2025-26, 28 November 2025, updated as on 1 October 2026), in Section A.5, paras 186–191.

Bank account for minor: what the rules allow at each age

The wording is permissive throughout: “may be allowed”, “is free to offer”. The age floor is “not less than 10 years”. A bank can set 12 or 14 instead, and the transaction limits are its own. That is why two banks can give different answers to the same 11-year-old.

Before you open a bank account for minor children, ask the branch three questions in writing: the age from which the child can operate the account alone, the daily withdrawal and card limits until 18, and whether there is a minimum balance. Para 187 says the bank’s terms “shall be duly conveyed to the account holder”, so a written answer is what you are entitled to.

When the child turns 18

Para 188 sets out what has to happen at majority: “fresh operating instructions and specimen signature of the account holder shall be obtained and kept on record”. If the guardian operated the account, “the balance shall be got confirmed”. The bank must also “take advance action, including communicating these requirements to minor account holders attaining the age of majority”. In practice, expect a letter or SMS a few months before the 18th birthday. If none comes, visit the branch with the child’s KYC documents.

From the banker’s desk: the most common snag at 18 is a signature mismatch. A child who signed in block letters at 11 signs differently at 18. Updating the specimen signature at 15 or 16, if the bank allows, avoids a frozen account in the first month of college.

The tax side: interest is clubbed with a parent’s income

Opening the account in the child’s name doesn’t move the tax. Under section 99(1)(c) of the Income-tax Act, 2025, a parent’s total income includes income arising to a minor child. The exceptions are income from the child’s own work, from activities using the child’s “skill, talent, specialised knowledge or experience”, and income of a child with a specified disability. Section 99 also says which parent: the one “whose total income before such inclusion is greater”, if the parents are married, or the parent who maintains the child, if they aren’t.

Schedule III, serial 17, then allows an exclusion of up to ₹1,500 “in respect of each minor child whose income is so includible”.

Worked example: a ₹1.2 lakh FD for a 12-year-old

The slabs here are assumptions to show the method. Your own slab depends on the regime you choose. At 7%, a deposit of up to about ₹21,429 earns interest within the ₹1,500 exclusion. Figures are from scripts/calc.py. Banks may still deduct TDS on the child’s FD under their own rules. See our explainer on Form 121 (earlier 15G/15H) for when a declaration helps.

Opening the account: a short list

1. Documents: the child’s officially valid document (usually Aadhaar), a birth certificate or school record for age, and the guardian’s KYC.
2. Choose the mode: guardian-operated, or self-operated if the child is 10 or older and the bank’s age floor is met. Ask for the bank’s limits in writing, as para 187 requires.
3. Add-ons: ask whether a debit card or UPI comes with daily limits, and whether you can lower them.
4. Nomination: add a nominee. See our nominee vs legal heir explainer.
5. Long-term saving: compare with the PPF rules and small-savings options before locking money in an FD.

Questions we could not answer tonight

What daily limits individual banks set for 10-to-17-year-olds. RBI leaves this to each bank’s policy, and published limits vary.

Whether the exact text of paras 186–191 differs between RBI’s PDF and the copy we read. RBI’s PDF host (rbidocs.rbi.org.in) didn’t load from our system, so we read the 1 October 2026 version from a third-party copy. The Income-tax Act, 2025 text was also read from a third-party copy.

Whether UPI apps treat a self-operated minor account the same way as an adult’s. That depends on the bank and the app.

The short answer for parents on a bank account for minor children: from age 10, the child can run the account, the bank sets the limits, and the interest is still taxed in your hands. Our guide to minimum-balance charges is worth a look too, since some minor accounts carry them.

FAQ

At what age can a child operate a bank account alone?

From 10, if the bank allows it. RBI’s floor is “not less than 10 years”, and banks may set a higher age and their own limits.

Can a mother open her child’s account as guardian?

Yes, for savings and fixed deposits, as long as the account always stays in credit.

Can a minor’s account go into overdraft?

No. Para 190 requires it to stay in credit at all times.

Is interest on my child’s FD taxable?

It is added to the income of the higher-earning parent under section 99(1)(c), after an exclusion of up to ₹1,500 per child.

Takeaway: a child’s own account is a good way to teach money habits from age 10. Plan for two things: the bank’s limits and the clubbing of interest with your income.