How to Open Demat Account in India?

Learn How to Open Demat Account in India Online or Offline.

Learn How to Open Demat Account in India both Online and Offline. Documents Required and Step by Step Process.

What is a Demat Account?

Demat refers to a Dematerialised Account. It is needed for share trading (buy and sell shares / stock). It is the First Step towards Equity Investment.

This Demat account is linked with your bank account. You can easily transfer funds from your bank account to your Demat account for online share trading.

All online trading and transactions that take place through this Demat account is handled by depository participant (DP). All share brokers / stock brokers, brokerage companies and R&T agents register under the SEBI act to handle share trading transaction.

Where to Open Demat Account?

A Demat account with a bank or any financial institution is what a broker need to do online share trading in Stock Market in India.

Please NOTE that a free Demat account or free trading account are same. Any investor willing to buy or sell stocks online need to have a Demat account or a trading account.

You can open a Demat account for online share trading with any financial institution (Broker) offering the service. Banks like SBI, HDFC, ICICI and Axis Bank offer such services. This bank or the financial institution will convert your physical security holdings into electronic (Dematerialized) holdings.

Check:

• What is Demat Account?
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Documents Required for Opening a Demat and Trading Account

You will have to submit following documents to open a Demat account:

1. Tax Identification Number (PAN Card)
2. A Canceled Cheque
3. Bank Passbook or Account Statement
4. Identification Proof (AADHAAR Card, Voter ID Card etc)
5. Address Proof (AADHAAR Card, Voter ID Card, Ration Card, Electricity or Telephone Bill etc)
6. Photograph

How to Open Demat Account in India?

The process to open Demat Account with a Broker or a Bank is same both Online and Offline. You will have to submit the same documents and go through the same steps.

Steps for Opening a Demat Account:

Step 1 – Fill up the Demat Account Opening Form and Submit

Fill the online on offline demat account opening form and submit. Fill in mandatory details.

Step 2 – Submit Required Documents

Upload or attach all the required documents – PAN Card, AADHAAR Card, Bank details, Photograph etc.

Step 3 – Complete e-KYC

Get your KYC details verified online or offline. Verification of the your e-KYC is done online.

Once you finish all the above steps successfully, you will immediately receive your Demat Account Number.

• Also Read: Where to Open Demat Account Online in India?

Demat Account for Online Share Trading

A Demat account can help you do online share trading in following ways:

• Transfer of Shares and Settlements – A Demat account is opened with a bank registered with a depository. The depository handles all the transfer and settlements. You just have to provide an
  instruction slip. If you are selling securities then it will be a delivery instruction slip. If you are purchasing securities then it will be a receipt instruction slip or one time standing instructions for credit.
• Receipt of Corporate Benefits – A Demat account is credit with all securities entitlements like bonus and rights. Just choose the right option in the share application form. This account forwards all cash benefits like dividends and interest directly to you and not through the depository. MICR code in Bank details in your Demat account ensures credit of cash transactions to your respective bank account without any mistake.
• Dematerialisation of Shares – The bank in which you hold your Demat account can arrange to convert your physical holdings into electronic form at your request. Just lodge the share certificates with the bank accompanied by a Dematerialisation Request Form (DRF).
• Rematerilialisation – The bank in which you hold your Demat account can help you convert your electronic shares back to physical shares.

FAQ on Demat Account

Conclusion

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