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Do you know how to open a Demat Account? If not this article is for you and helps you by guiding in the process of creating your Demat account.
Many people have known about bank accounts, from personal savings and current bank accounts to NRI accounts. These are used to deposit money and save in the banks. These avail both local and international online transactions. These banks provide some types of loans: Personal Loans, Education Loans, Mortgage Loans, Housing Loans, and Business Loans. The bank will clear or release the loan amount by following the certain rules and procedure depending on your properties or assets, bank balance, and fixed deposits,
Only a few of us know how to open an online Demat Account? If you are the one, then you should read the whole article and know what exactly is the demat account and what are the uses of having it.
What is a Demat Account?
A Demat account means a Dematerialised Account. This allows you to keep shares and assets electronically. The consumers can easily buy and store shares in this account while trading.
A Demat Account is mandatory for those who prefer to invest in government securities, stocks, bonds, mutual funds, exchange-traded funds.
An investor must create a Demat Account with Depository Participant (DP). The process of opening a Demat Account has been clearly explained below.
How to Open a Demat Account?
There are two methods available i.e; online and offline to open a Demat account. The step-by-step procedure for opening Demat accounts using online and offline methods is provided below.
Opening a Demat Account Online
Below is the step-by-step procedure on how to open a Demat account online. Follow them carefully while you create the account:
1. Choose a Depository Participant (DP):
Select a reputable Depository Participant (DP) like Zerodha, ICICI Direct, HDFC Securities, Upstox, and Groww.
While choosing a DP, you should consider the factors like trading platform, brokerage charges, customer support, and additional services they avail. You can go for which suits your purpose and interests.
2. Visit the DP’s Website:
On your web browser, open the chosen DP’s website. There you’ll find the “Open Demat Account” option. Click on it.
3. Fill in the Application Form:
In this step, an application form will open. Here, you have to provide accurate personal information. These include:
- Name
- Date of Birth
- PAN Card Number
- Mobile Number
- Email Address
- Address
- Bank Account Details
In this step, you may be asked to upload the scanned copies of your Documents including PAN card, Aadhaar card, and address proof. This is for verification purposes.
4. E-KYC Verification:
This step is to simplify the process and reduce paperwork as most of the DPs offer e-KYC verification. This involves video verification and Aadhaar authentication.
5. Sign the Agreement:
Here, an OTP will be sent to your mobile or you’ll need to provide an e-signature in order to digitally sign the agreement.
6. Account Activation:
Your Demat account gets activated after completion of documents verification. You’ll receive a Client ID and password to access your account.
Opening a Demat Account Offline
Most of the time, online methods are convenient. Still, you can open a Demat account offline. The step-by-step guide is provided below for the Online method.
1. Choose a Depository Participant (DP):
As mentioned in the online method, same here, select a reputable Depository Participant that includes Zerodha, ICICI Direct, HDFC Securities, Upstox, and Groww.
2. Visit a DP Branch:
Locate the nearest branch of your chosen DP.
- Carry the necessary documents:
- PAN Card
- Aadhaar Card or Voter ID
- Passport-size photographs
- Cancelled cheque
- Income proof (optional, for certain investment types)
3. Fill the Application Form:
Here, you’ll have to fill out the account opening form. A DP representative will assist you with this.
Provide accurate information and sign the form.
4. Document Verification:
The DP representative will verify your original documents.
Keep copies of all submitted documents.
5. Account Activation:
Once your documents verification is done, your Demat account will be activated.
You will receive a Client ID and Password in order to access your account.
Documents Required for Opening a Demat Account
Typically, you need the following documents to open a Demat account in India.
Mandatory Documents:
- PAN Card: This is a mandatory requirement for all individuals.
- Aadhaar Card: This can be used as both proof of identity and address.
Additional Documents (Optional):
- Passport
- Voter ID Card
- Driving License
Note: The specific documents required may vary slightly depending on the depository participant (DP) you choose.
FAQs
How to check Demat Account?
There are multiple ways to check your Demat Account. For this, you can login to your DPs account. You can login to your account on the NSDL and CDSL website. Moreover, you can download and install applications on your mobile from app stores to check your Demat Account status. There are some other ways you can explore if these don’t help you.
Can I have multiple Demat Accounts?
You can have multiple Demat accounts in India by following the guidelines strictly.
Is Demat Account required for Mutual Funds?
A Demat Account is not strictly required to invest in mutual funds. You can purchase them directly through your bank account or online platforms without having one.
Where to open free Demat Account?
There are websites that offer free Demat Account. Some of them are Zerodha, Samco, Sharekhan, and 5paisa. Before considering opening a Demat Account on these websites, thoroughly check for any additional charges and terms of service.
Conclusion
That’s all for now. Still, if you have any doubts related to this topic, let me know by the comment section provided below. Share this helpful article on social media. Let’s know what you have chosen to open a Demat Account.