From ATM cards to independent access: RBI’s new minor account rules explained; what parents should know

The Reserve Bank of India (RBI) has revised its guidelines for opening and operating bank accounts for minors — children below 18 years of age. The new framework gives more flexibility to banks while ensuring parental oversight and secure handling of children’s finances. Banks have been advised to align their existing policies with the revised norms by July 1, 2025. Until then, current practices may continue.

According to a circular from the RBI addressed to commercial banks and cooperative banks, individuals under the age of majority may be permitted to open and manage savings and term deposit accounts with the assistance of their natural or legal guardian.

The RBI circular stated: "Minors above such an age limit not less than 10 years and up to such amount and such terms as may be fixed by the banks keeping in view their risk management policy, may be allowed to open and operate savings/ term deposit accounts independently, if they so desire, and such terms shall be duly conveyed to the account holder."

Additionally, once the account holder reaches the age of majority, it is necessary to obtain updated operating instructions and a sample signature, which should be stored for reference purposes.

However, the RBI clarified that these rules are not mandatory. Banks may choose whether to implement them fully, depending on their internal risk policies and customer suitability assessments.

"The banks are free to offer additional banking facilities like internet banking, ATM/ debit cards, cheque book facility, etc, to the minor account holders basis their risk management policy, product suitability and customer appropriateness," the circular said.

Key changes parents should know

Minors of any age can now open savings or fixed deposit accounts in their name and operate them through their natural or legal guardian, including their mother.

Children aged 10 years or older may be allowed to operate their accounts independently, with banks setting limits and conditions as per internal policies. These must be clearly explained to the minor.

Once a minor turns 18, banks will seek fresh operating instructions and a specimen signature. If the account was managed by a guardian, the bank will confirm the balance.

Facilities like ATM/debit cards, internet banking, and cheque books may also be offered to minor account holders. However, banks must ensure that overdrafts are not permitted, and accounts must always remain in credit.

These changes aim to support financial literacy while keeping parental guidance central.