TomorrowMakers

Used to hold shares and securities in electronic format, a demat account is a must if you wish to invest and trade in the stock market.

Opening a demat account Here’s a simple step-by-step guide

So you have finally decided to invest your valuable savings and explore the stock market. But before you can start trading in shares, you need to open a demat account. This allows you to hold your shares in an electronic form, and is a secure and convenient way to keep track of your stocks and investments. 

Opening a demat account is quite a straightforward process and can be done in just 15 minutes.  You can even open one with zero account balance. Here’s a step-by-step guide that can help you.

1. Choose a depository participant

To open a demat account, you must choose a depository participant. This can be any authorised bank, financial institution, or broker, with whom you wish to open a demat account. For this, go the website of either Central Depository Services Limited (CDSL) or National Securities Depository Limited (NSDL). To benefit investors, depository participants strive to offer the best features at minimum cost. Choose a demat account with low brokerage charges.

2. Submit a demat account opening form

Visit the website of your depository participant and fill out the online demat account opening form.

3. Fulfil the KYC norms

Next, you will be asked to fill in a KYC form, and submit scanned copies of documents such as your PAN card, identity proof, address proof (Aadhaar card, electricity bill, or voter’s ID), bank account statement, income proof, and passport size photographs. To speed up the process, make sure you have all the relevant documents in hand before applying.

Related: Understand the basics of a Demat account

4. Go through the verification process

After submitting all the necessary documents, you will be asked by your depository participant to go through a mandatory ‘in-person verification’ (IPV) process to verify the authenticity of your documents. This can be done by physically visiting your service provider’s office or the depository participant might offer to conduct it online via a webcam or a smartphone.

5. Sign the agreement 

Once you have completed the verification process, click on the ‘e-sign’ button to sign an agreement that mentions all the rules, regulations and rights associated with holding your demat account. You will then receive a one-time password (OTP) on your registered mobile number. After you type in the OTP, your e-sign will be affixed and the e-KYC process will be completed.

Related: Look beyond gold jewellery and invest in these avenues instead

6. Get your ID number

When the account is opened, you will receive a unique client ID from the depository participant. This, along with other details, will help you get access to your demat account and you can start trading online.

Related: How to invest in stocks like a pro

Last words

Note that you can hold more than one demat account linked to a single PAN. However, they can’t be opened with the same depository participant. Also, while opening your demat account, keep these pointers in mind:

  • Link your demat account to your trading account
  • Ensure that you are aware of all the demat account charges
  • Fill in your details correctly
  • File your nomination

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