Demat account is a type of account where one can buy, sell and hold shares in electronic form. Investors can also hold debt instruments like bonds, government securities, mutual funds and exchange traded funds (ETFs) etc. One cannot trade in stock markets without having a demat account.
How to open demat account?
Visit one of the depository participants listed by CDSL, NSDL. Submit documents an ID and address proof.
Execute an agreement on a stamp paper which defines the rights and obligations of both, the investor and the DP.
Once the account is opened, a unique BO ID (Beneficial Owner Identification) Number is allotted. This number will be needed in all future transactions.
What are the documents needed to open Demat Account?
Needed documents pertaining to your identity, date of birth and residence proof. PAN card, passport, driving license, Aadhaar, utility bill and election card can act as valid proofs.
Know Your Customer (KYC) plays a vital role and all the documents should be submitted to meet the requirement.
Demat Account Online
One can open demat account online by filling the online form and one of the executives will get in touch for further communication.
Things to check before opening Demat account
Before opening demat account one should compare with other institutions and understand the process on how it works and more.
How to transfer shares from one account to another?
To transfer shares, one has to fill the deilvery instruction slip and enter all the details. The shares will be delivered on next working day. Click to know more on transferring shares.
Charges related to Demat account
There are various charges involved in opening and maintaining demat account depending on the type of demat account.
Free Demat account
One should not select the bank based on opening fee. One should check other charges, including the brokerage charges.
Benefits of Demat account
Having shares in demat form will have no chance of your certificates being stolen and later forged as the shares are held in the electronic form.
This eliminates the risk posed earlier, when shares were held in the physical format. Shares are transferred immediately. Know more advantages.
One can also opt for 3 in 1 accounts which includes savings account, trading account and demat account where all accounts are linked.