Steps & List of Documents Required to Open a Demat Account

Dematerialization is the technique through which a client may have physical certificates of securities turned into electronic balances (NSDL). Total shares and securities are transformed into digital form, making it simpler and quicker for investors to acquire, hold, and sell shares.

Two parts make up a Demat account. There are two ways to dematerialize your physical shares: You may either submit a DRF or purchase or sell shares directly via your account. All securities purchases are credited to the Demat Ac, while all securities sales are deducted from the Demat. Demat accounts are immediately rewarded with bonuses and split shares.

Stocks may be tracked electronically with a Demat A/C. Shares, mutual funds, gold bonds and government assets may now be held in a Demat A/C alongside equities. When you purchase shares in your trading account, the funds are sent to your Demat account in Three days. Your Demat A/C gets debited one day after you sell stocks. You may open an account with a depository trust company (Demat) to protect your money.

What are the Steps for Opening a Demat Account?

Are you wondering how to create a Demat account? Look at the steps below:

• You must choose a Depository Participant to open a Demat account (DP). In order to create a Demat account, the first and most crucial step is to choose a depository participant (DP). Banks, stockbrokers, and other online investing platforms provide DP services in India. Choose a distribution partner that offers and provides features that meet your requirements and criteria when picking a service provider. 
• Fill up and submit the Demat Account Opening.
• To create a Demat A/C opening, go to the website of your DP and complete the online form. Several depository participants provide this option to open trading and Demat accounts simultaneously.

➣ Follow the KYC guidelines. 

You must meet Know Your Customer (KYC) criteria after submitting your Demat application. Scanned copies of the necessary KYC papers are required, such as a passport or driver’s license, bank account statement, and proof of income. Also, it’s best to have all relevant paperwork on hand to expedite the application process. 

Verification is the last step in the process. 

‘In-Person Verification’ is required after submitting your KYC information (IPV). Checking the accuracy of your records necessitates the completion of this task. Depending on your DP, you may be required to present at one of the offices of your service provider for verification purpose. However, several depository participants provide IPV services through webcam or smartphone today rather than in person. 

➣ Sign the Agreement’s Copies and Return Them 

Signing an agreement with your Depository Participant will be required after verification. The obligations and rights of both the depository participant and the investor are outlined in this agreement. 

After the following steps are completed, you will get your BOID Number. 

To begin processing your Demat application, you must sign the agreement. Once your application is granted, you’ll get a unique Beneficial Owner Identification Number (BOID). You can also access your Demat account by this BOID. 

Which Documents are required for Opening a Demat Account?

To start a Demat account, you’ll need a few pieces of paper. Thanks to this, new candidates will follow the process from beginning to finish without any hassles. List of the documents are required to open a Demat account are listed below:

• As proof of your bank account, a copy of your account passbook or bank statement 
• Your PAN card was photocopied as identification. 
• A record of your income: your most recently filed tax return or your most recent pay stub Returned Check. 
• A pair of passport-sized photos 
• Address proof: Proof of residence may be as simple as a copy of one of the following papers. 
• A landline phone bill. 
• A bank account statement or passbook
• Identification card for voting 
• Card with the Aadhaar number 
• The bill for gas. 
• Bill for apartment upkeep 
• Food stamps 
• Signed leasing contract 
• A valid driver’s license is required. 
• A passport that is up to date and in good standing 

Online Demat Account Registration 

How to Open a Demat Account Online?

Requests for a Demat Account may be made online with any DP. The steps are listed below:

• Visit the webpage of your favourite DP. 
• Please provide the following information after clicking the ‘open Demat account’ option. 
• A one-time password (OTP) will be sent to your email address and phone number. 
• To create a Demat Account, the DP will contact you to complete the above-mentioned paperwork and get in touch with you. 

There is no account starting fee for a free Demat account opening and online trading account, and there are no annual maintenance expenses for the first year of the account. 

Investors may establish free Demat and trading accounts to facilitate their investments. A Demat account may only be used to keep shares in custody; you must open a trading account with a broker to purchase and sell shares. 

Summary 

One may hold stock market shares and other assets, such as Initial Public Offerings (IPOs), bonds, government securities, mutual fund units and ETFs, via a Demat Account. A Demat Account protects your savings and makes them easier to manage and maintain. For Open Demat Account, there is no minimum balance’ that must be maintained. Additionally, a single PAN may be used to connect many Demat Accounts. However, the depository participant (DP) is different.