The Reserve Bank of India (RBI) has introduced a new rule that allows children who are 10 years old or older to open and manage their own savings and term deposit bank accounts. This rule was announced on April 21 and is meant to help more young people become part of the banking system and learn to manage money from an early age.

Earlier, children could open bank accounts, but only with the help of a parent or legal guardian. The guardian was responsible for managing the account, and children could not operate it on their own. Also, services like debit cards or internet banking were usually not given to minors.

But now, the RBI says, “Minors above 10 years old will be permitted to manage their accounts without the need for a guardian, provided the account terms align with the bank's risk management policies.” This means children aged 10 and above can run their accounts on their own if the bank agrees and it fits their safety rules.

However, the option to open accounts through a parent or guardian still exists. This includes mothers and legal guardians. Banks are also required to make sure that these accounts always have money in them — the balance should never fall below zero.

Banks can also choose to provide extra services like debit cards, internet banking, or cheque books to minors, but only if it's safe and appropriate. The RBI said, “Banks can also offer additional services like internet banking, debit cards, or cheque books, based on what's suitable for the customer and in line with their risk policies.”

Once the child turns 18, the bank must update all records, including the signature and operating instructions for the account. Banks across India have until July 1, 2025, to follow this new rule. 

 

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