Open a Demat Account

4 Easy Steps to Open a Demat Account

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A demat account is a safe storage place for all the securities of an investor. It holds the securities in digital format. In older days, investors got paper certificates when they purchased securities in the share market. The stock exchanges issued certificates which showed their ownership over specific securities. However, there were several limitations of physical share certificates. Instances of damage or loss were common. Theft and forgery also became a headache for both investors and government agencies. To deal with such problems arising out of physical certificates, the Securities and Exchange Board of India (SEBI) introduced demat accounts in 1996. 

The process to open a demat account

Today, you can open demat account with many financial firms. In addition, several institutions are offering demat accounts. You can also download an online trading app and open your demat account easily. If you are looking to open demat account for yourself or any family member, follow the steps mentioned below. This guide shall help you open demat account in just four simple steps.

Step 1: Choose a suitable depository participant

A Demat account is crucial for investing in the financial market. So, be careful while opening it. It is essential to pick a good depository participant or DP. DPs are firms that offer demat accounts and other financial products and services. As there are numerous firms, you should prefer one which provides the best services at affordable prices. Demat accounts come with different charges, such as brokerage fees, account opening and maintenance charges. These charges play a significant role in determining the overall cost of trading in the share markets. Some firms levy different charges for trading in different types of securities. So, properly assess the charges levied by a stockbroker before opening an account.

Moreover, always choose a financial institution which offers a robust platform. A platform must carry out all the transactions and other tasks smoothly. It must employ the latest and high-tech software to provide a seamless experience. 

Step 2: Fill up the application form 

Once you zero in on a suitable broker that fulfils all your requirements, contact it and get the account opening form. You can visit its website and download it. Alternatively, go to the nearest branch office and get it from their agents. Fill out the application form in all respects. You would have to mention the following details.

  • Your full name
  • Date of birth
  • Residential address
  • Phone number
  • Email ID
  • Nominee, if required
  • Bank account details
  • Pan number

After completing it, submit the duly filled form and place your request to open demat account. Remember, you will have to complete KYC and provide the requisite documents. As per the instructions of India’s market regulator SEBI, it is mandatory to complete the Know Your Customer (KYC) process. Your broker will provide a KYC form where you will mention your details.

Step 3: Complete the documentation process

Investors must provide the relevant documents for verification along with the application form. The stockbrokers ask you for documents for two primary reasons. The first is identity verification, and the second is address verification. In addition, the bank account proof and pan details are also. Here’s the list of documents you can submit.

For identity proof

  • Voter’s ID
  • Aadhaar card
  • Driving license
  • Passport
  • Any valid id proof issued by a government authority or institution like a university, bank or government office.

For address proof

  • Aadhaar card
  • Voter’s ID
  • Land lease agreement
  • Passport
  • Driving license
  • Utility bills like electricity, water and gas bills or landline connection bills

Bank account proof

  • Copy of bank passbook
  • copies of your account statements for the last six months
  • A cancelled cheque

Step 4: Complete verification and get the demat account 

After an individual submits the documents, brokers verify the same. They confirm whether the information provided by him is authentic. On successful verification, a stockbroker will provide you with the agreement. It will mention the rules and regulations, rights and obligations of both the broker and investor. Go through the terms and conditions and sign it. That’s it! The broker would provide you with a Beneficiary Owner Identification Number (BO ID). This is a unique number provided to every individual opening a demat account. You will also receive the login credentials to your demat account on the registered email id and mobile number. Use the login ID and password to access your demat account.

Opening a demat account is not an arduous task. Some reputed firms like Kotak Securities provide a complete solution to open demat account. You can only fill up the application form online and proceed with the account opening process quickly. Moreover, you can download their online trading app and open your demat account from your phone. The app is available for both android and ios users. So, opening a demat account is at your fingertips now.

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