The Buyt Desk
A Demat Account is a mandatory requirement if you have been planning to start investing or trading in stock markets. This account holds shares and securities in digital format. With Stock markets giving better returns as compared to a bank fixed deposit or a small saving scheme such as public provident fund(PPF) people have been moving towards equity investments. With the advent of fintech companies various apps have brought investment in shares and mutual funds at our fingertips.
So, let’s check what a Demat Account is and how to open a Demat account in India.
What is a Demat Account and Its Purpose?
The full form of Demat is a dematerialised account. Dematerialisation means that you convert your physical purchase of shares in a digital or an electronic format which is easy to store. It makes the management of shares and its access seamless. These accounts are maintained by depository participants in India- NSDL(National Securities Depository Limited) and CDSL( Central Depository Services Limited).
How to Open a Demat Account In India?
The process of opening a Demat account in India is easy and requires only a few documents. Here is the complete guide:
Step 1: According to your requirement and match, choose a depository participant or service provider.
In India, investment platforms, banks and stockbrokers provide the DP service.
Step 2: After selecting the DP, visit their official website and fill in the Demat account opening form. It is easy. Every DP has the account opening form on their home page. Do not forget to assign a nominee while filling the form.
Step 3: Next, fill the information form Know Your Customer (KYC Form).
Step 4: Submit the documents. To submit it, attach the scanned copies of documents like identity proof, bank account statement, address proof, income proof. All these documents are mandatory and prove the ownership of assets via self declaration. Don’t worry if you don’t have the scanned copy of all documents. The photograph of the same taken from the smartphone will also solve the purpose.
Step 5: After the successful submission of the form, DP will verify you as a person. They do this by calling you.
Step 6: DP approves the account opening request after carrying out a thorough verification.
Step 7: At the end, the DP will issue a unique Beneficial Owner Identification Number or BO ID. The account holder can use this number to access it.
Step 8: After the account opening, link the Demat with the trading account as you will not be able to trade without that.
Documents Required To Open Demat Account In India
To open a Demat account without hiccups, carry these documents with you in advance.
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Valid identity proof
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Valid address proof
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A bank passbook or account statement
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Last three-month salary slip/your income tax return/last six-month bank account statement.
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The income tax return or last six-month bank account statement is mandatory for working in the currency and derivatives segment.
