Equity investing has become very common in India since it allows investors to have better returns. It can multiply your wealth over the period. So, for investing in equity, all investors need to open a Demat account. You can open a Demat account both offline and online.
However, read it further to know what is actually a Demat account, how you can open a Demat account offline and online, the basic charges, and the necessary documents you need to submit.
What is a Demat account?
The Demat account or the Dematerialized account helps you to keep your assets and shares electronically. You can buy and store your shares in your Demat account when you do trading online. It offers the easiest and safest way to trade with the investors. With it, you do not have to deal with physical securities.
Steps for opening a Demat account-Online
An individual can easily open a Demat account online. You just have to follow the steps mentioned below-
- Step 1: First, you need to select a safe and reliable DP website. You may compare different websites and choose as per your liking.
- Step 2: After you go to a DP website, you can see an option ‘Open Demat Account’. Some websites even give on-screen instructions on how to do everything.
- Step 3: When you click on the ‘Open Demat Account’ option, an online form will appear. You do not have to pay anything when filling out the form. So, fill the form with valid information like email address, phone number, etc.
- Step 4: After you submit your form, an OTP will be provided for further confirmation.
- Step 5: Submit your banking, and PAN card details so that you can make future transactions.
- Step 6: Now, verify your KYC information properly and have your Demat account number.
Steps for opening a Demat account-Offline
If you do not want to open your Demat account online, you can go for the offline option. It is also a very less time-consuming process.
- Step 1: No matter what way you choose, in both ways you need to select a DP or Depository Participant. It can be a financial institution, a licensed bank, or a broker.
- Step 2: Next, you have to submit the necessary documents to DP so that you can open a Demat account.
- Step 3: Individuals have to sign an agreement that will have restrictions, rules, and rights outlined. So, you need to read them properly.
- Step 4: Now, after the account is opened, you will get a Unique Client ID. It will help you to access your account.
- Step 5: Your chosen DP will give you instruction sheets that you can further use for depository services like purchase, transfer, etc.
Documents needed to open a Demat account
Knowing what documents you need to provide to open a Demat account is important to avoid problems at the time of opening. Here is the list:
- Proof of identity like PAN, Aadhaar, voter ID card, etc.
- The statement of your account and bank passbook to know the bank account number
- Residency proof like electricity bills, passport, driving license, etc.
- Passport size, current photograph, etc.
Basic Demat account charges
There are no annual maintenance charges you have to pay for your Demat account. But, holdings between Rs.50,000 and Rs. 2 Lakh will attract a maximum of Rs.100 plus tax. There will be custody charges for one time only to protect your storage by entities such as CDSL or NDSL. Also, you have to give transaction charges to the broker which may be 0.10% of your total transaction value.
Conclusion
A Demat account is necessary for people who want to trade in the stock market. So, follow the steps and open your Demat account as quickly as possible. Provide valid documents and start trading safely.
