Demat Account or dematerialized account holds all the investments an individual makes in shares, government securities, exchange-traded funds, bonds and mutual funds in one place. This account is needed to hold the stocks in electronic format.Demat account functions like a bank account.
Know how to open a demat account:
How to open a Demat account?
If you want to open a demat account, you can obtain the application form from any Depository Participant (DP). The DP selected should be registered with Depository and SEBI. The duly filled application form along with PAN Card and Proof of Address can be submitted to the DP.
Any of the following documents are accepted as Proof of Address:
- Voter ID Card
- Photo Identify Card issued by Central Government / Statement Government / Statutory bodies / Banks / Public sector undertakings / Colleges affiliated to universities
- Credit card statement
- Debit card statement
- Bank passbook
- Ration card
- Electricity bill / Residential telephone bill (not older than two months)
- Leave and Licence agreement
At the time of submission of documents, the DP may request you to show the original documents for verification. You have to enter into an agreement with DP in the standard format, which gives details of rights and duties of investor and DP.
The applicant will get a copy of the agreement and schedule of charges for future reference. After submitting the requisite documents and signing the agreement, DP will open the account and give your 16 digits Demat account number (8 digit DPID and 8 digit Client ID) to you. This number is also called as Beneficial Owner Identification number (BO ID). All your purchases and investment in Securities will be credited to this account.
Multiple demat accounts
When you sell your securities, your demat account will be debited. If you wish to have more than one demat accounts, you can have multiple demat accounts. 6 Biggest Mistakes Stock Market Investors Makes
The applicant can choose the DP as per his or her convenience. There is no rule to open DP account with your stockbroker. The applicant need to pay for
- Dematerialisation and Rematerialisation of your securities
- Annual account maintenance charges
- Transactions fees