How to open an online Demat and Trading Account

 How to open an online Demat and Trading Account


  2. Step 1: Choose Depository Participant (DP) ...
  3. Step 2: Submit Demat Account Opening Form. ...
  4. Step 3: Fulfill KYC (Know Your Customer) Norms. ...
  5. Step 4: Go through the Verification Process. ...
  6. Step 5: Sign the Agreement Copies. ...
  7. Step 6: Get Your BO ID Number.

In simple words, Demat account means Dematerialization. Demat account helps in holding securities in an electronic form rather than holding it in physical certificate. Demat Account also facilitates easy transfer, buying/ selling of securities.

Demat account benefits both investor as well as stockbroker

To investor- 1) Can sell even on share 2) Can keep all types of services 3) Safer than physical certificate

To Stockbroker- 1) Eliminates chance of forgery 2) Higher trade volumes 3) Reduction in cost and increase in efficiency

In the below video you will get in depth knowledge about Demat account, procedure to open the account and alalssome relevant tips. This particular helped me as well in understanding the procedure carefully, so I hope it will help you too.


Step 1: To open a demat account, you have to approach a depository participant (DP), an agent of depository, and fill up an account opening form.

Step 2: Along with the account opening form, you must enclose photocopies of some documents for proof of identity and proof of address.

Step 3: You will have to sign an agreement with DP in the depository prescribed standard format, which gives details of rights and duties of investor and DP. You are entitled to receive a copy of the agreement and schedule of charges for future reference.

Step 4: The DP will then open an account and give you the demat account number. This is also called beneficial owner identification number (BO ID). All your purchases / investments in securities will be credited to this account. If you sell your securities, your demat account will be debited.

You can have multiple demat accounts if you so wish. You can choose your DP as per your convenience and there is no compulsion to open DP account with your stock broker.

Points to remember

Update your bank account details (bank account number, IFSC code) and postal address etc of your demat account as and when there is a change, as you will receive direct credit of refunds, dividends, interest & redemption payment and corporate correspondences like annual reports notice of AGMs etc. as per the details mentioned in your demat account.

Demat account charges

Investors are required to pay the charges towards:

  • Dematerialisation and rematerialisation of your securities
  • Annual account maintenance
  • Transactions fees (only for sell transactions)
  • The charges of DPs are available in comparable structure on the websites of the depositories.

Things to note

  • The DP may revise the charges by giving 30 days notice in advance.
  • If demat account is closed in between of the year, annual maintenance charges shall be levied proportionately for each quarter.
  • There is no minimum number of shares that have to be kept in the demat account.
  • No charge is applicable for closure of DP account.
  • No charge for transfer of holdings from one DP to another DP, if investor is not satisfied with the services of your existing DP.

Nomination

Nomination smoothens the process of transmission of your securities to your heirs, upon demise. For physical shares, you have to avail nomination separately for each company in which you hold shares / debentures. Whereas, by availing nomination for your demat account, all your investments in that account is covered under that nomination.

How to demat your shares?

To demat your physical certificates, you should approach the DP and submit the following documents:

  • Dematerialization Request Form (DRF)
  • Physical certificates by marking “Surrendered for Dematerialization”
  • Separate DRF has to be filled for each ISIN.

Process of dematerialisation:

  • Surrender your physical certificates to your DP for dematerialisation.
  • The DP intimates your request to the depository through the system.
  • The DP submits the certificates to the registrar and share transfer agent (RSTA) of the company.
  • In case of any objection or in case of additional documents (if any), the RSTA informs you directly. RSTA confirms the dematerialisation request from depository.
  • After dematerialising the certificates, RSTA updates the accounts and informs depository regarding completion of dematerialisation.
  • Depository updates its accounts and informs the DP.
  • The DP then updates your demat account by crediting the shares.
  • Before approaching your DP for demating your shares, you can check the list of shares and debentures that can be dematerialised from the websites of CDSL and NSDL.

To convert physical certificates into demat mode, the name in the share certificate should match with the name of the demat account holder.

In case of joint holding, the name should be in the same order both in the physical certificate as well as in the demat account. However, you can request to change the order of the names of the joint holders in the share certificate by submitting a Transposition cum Demat Form.

ISIN number

ISIN (International Securities Identification Number) is a unique 12 digit alpha-numeric identification number allotted to each security. (E.g.- INE383C01018). Fully paid-up equity shares, partly paid-up shares, equity with differential voting / dividend rights issued by the same issuer will have different ISINs.

How to find ISIN number?

The details of ISIN number of securities are available in the website of National Securities Depository Ltd and Central Depository Services (India) Ltd.

Power of attorney (PoA)

  • You have the option to authorise any person to operate your DP account by executing a power of attorney (PoA) and submitting it to the DP. PoA enables the authorised person to operate the account on your behalf.
  • You have the option to grant PoA in favour of your broker and / or DP to operate your account, i.e. to buy or sell shares on your behalf, debit or credit your bank account and DP account. However, you are required to carefully read and understand all the clauses of the PoA before signing it.
  • PoA is an optional facility and executing it is not mandatory. No stock broker or DP can deny services to you if you refuse to execute it. You can revoke PoA at any time.

Other features of demat account

Consolidation: If you hold various folios of a particular company and want to consolidate them into single folio, you can forward the physical certificates along with the letter signed by you to the RSTA of the company.

Account freezing: You can freeze your account, specific security or specific number of securities for any given period of time.

Account types: Similar to the bank account, you can open demat account in single / joint names / multiple accounts. If you are opening an account for the minor, guardian should be appointed for operating the account.

However, you cannot open demat account in “either or survivor” basis. You cannot change name or add or delete the account holder’s names. In such instances, you have to open new demat account with the desired names.


Yes, you can open your demat account online. With the transition from paper securities to online transactions, the face of trading has changed for the country. And, as everything goes online, and paper form securities were eliminated in 1996 in India, the demat account was introduced. This demat account is an account that will hold all your financial securities in the digital format.

It is very much possible for anyone interested in trading stocks online to open a demat account. All you need to do is select a depository participant from the website of NSDL and CDSL (Indian depositories). Undertaking the demat account open task is not a challenging one. The challenge lies in selecting the best depository participant that will be able to fulfil your trading needs. I can advise you the online trading platform that I’ve been using for some time now.

My Etrade is a pure online trading product from the Bonanza group, that have 25+ years of industry experience. Not only just their free demat account open or other fee benefits (like zero amc or lowest brokerage costs), but several other features of this online trading platform have helped me in my trading journey online. These include:

  • Zero Annual management Charges
  • Lowest brokerage cost - ₹18 per executed order - the lowest in the country!
  • Trade from Anywhere
  • Access to NSE, BSE, MCX, NCDEX, all markets in one single screen
  • Lowest Brokerage Rate of ₹18 per executed order for all trade types (equity, commodity, derivatives, etc.)
  • Advanced Intraday and Historical Charts
  • Expert Assistance and Dedicated Support



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