How to open a Demat account

Learn how to open a trading & Demat account online and offline, documents required, and also learn the after account opening process.

Demat Account holds the shares, bonds, mutual fund units, Exchange Traded Funds (ETFs), etc. in a digital format. It replaces the physical certificates with their digital equivalent for easy storage and transfer. Imagine what it would be like to manage dozens of paper certificates of all the shares and mutual funds you hold. Before beginning the process of investing it is important for an investor to understand what is Demat account and how it functions, so they will be able to use it efficiently for generating profits. An investor can open a Demat account without possessing any shares and can maintain a zero balance in their account. How to use a Demat account? An individual can open their Demat account by registering with an investment broker or a sub-broker. Access to a Demat account requires an active internet connection and a transaction password that is provided after the successful opening of a Demat account. The first step in opening a Demat account involves selecting a depository participant who acts as an agent to the depository. It will be followed by filling out the account opening form and submission of identity proof, address proof, PAN card, and a passport size photograph. A detailed description of all the acceptable documents can be found on the official website of the financial institution. Once an investor has agreed to the terms of the agreement and charges, an in-person verification is initiated. After the processing of the application is done, post verification, a client ID, or an account number is provided. It can be used by an investor to access their Demat account online. An investor can use this account for buying and selling shares, stocks, and derivatives and use it as a storehouse for the stock portfolio. With a Demat account, an investor will also need a trading account and a stockbroker for carrying out the purchase of sales of shares. A trading account typically reflects the history of buying and selling in a specific account. It is the duty of the broker to transfer the shares to a Demat account of the investor after the amount for purchase is paid before the pay-in date. It is compulsory for an investor to have a Demat account in order to purchase shares as trading equity involves the delivery of shares. How To Create a Trading Demat Account? In India, you can open a trading Demat account either online or offline. Opening an account online is much more convenient and faster compared to the offline process. With that said, let us explore both online and offline account processes in detail. Documents required to open a Trading Demat Account Online. You need to have a soft copy of the following documents while opening an account online: Identity Proof (PAN Card Mandatory) Address Proof (Aadhar, Voter ID, Passport, etc) Passport Size Photo Income Proof (Latest six month’s bank statement, Latest ITR copy, Three month’s salary slip) Scanned copy of the signature Go through how to open a Demat account to know the process of Demat account opening.

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