A Demat or a Dematerialised account helps you store your assets and shares in electronic format. If you are planning to venture into trading, it is crucial to understand how a Demat account works and the process of opening it.
Having a Demat account is a mandatory requirement if you wish to trade in securities electronically. As you park your funds in a bank savings account, a Demat account stores your shares and securities.
Simple Steps to Open a Demat Account Online
While you can open a Demat account offline or online, the latter is comparatively quicker than the former. Before understanding how to open a Demat account, you need to know the working of the account. This process changed for the better when SEBI (Securities and Exchange Board of India) launched the concept of Demat accounts.
Here, you can transact or hold shares electronically, saving you from the hassles of managing physical securities. This is because a Demat account allows you to convert your physical shares into electronic format, enabling higher accessibility. Now that you know the significance of a Demat account and its working, learn how to open a Demat account in India by following the process outlined below.
A Step-by-Step Process on How to Open a Demat Account
You can create a Demat account online with a DP of your choice. Remember that as an investor, you are not allowed to involve in trading directly with the stock exchange. Instead, you require an intermediary to help you do so.
This intermediary who allows you to trade freely in the stock market is known as a depository participant. With a multitude of DPs offering numerous Demat accounts, you need to run a thorough check to help you choose from the best Demat accounts in India.
Step 1: Choosing the Right Depository Participant for Your Demat Account
This is the most crucial step you must consider when opening a Demat account. Do a careful analysis of the options and select a suitable DP. Furthermore, following this step religiously helps you choose the best Demat account in India, which can affect your investment too. With the right account, you could get access to better tools and key services.
Step 2: How to Complete the Online Application Form Easily
Once you have zeroed in on the right DP, visit the official website and click on the option that allows you to open/start a Demat Account. While this will differ for each DP, you will always be required to fill out a simple application form to get started. Here, you will be required to submit basic information, such as:
- Name
- Mobile number
- Residential address
- Email ID
- PAN card information
Do note that the information you are required to share must be as listed on your official documents. Discrepancies will cause issues and delays.
Step 3: Submit Your Banking Details for Verification
After completing your personal details, you have to enter your bank information, such as your account number, type of your account, IFSC code of the bank, and other relevant details. Providing bank details helps the issuer company debit money as per your trading requirements, and credit the amount payable to you in the form of interest or dividends.
Step 4: How to Submit Relevant Documents Online
This step is mandatory as it confirms your genuineness. Submit all the necessary KYC documents (ID and address proof) along with your recent photograph to help you complete the process of opening a Demat account online.
Step 5: Complete the Self-verification Process
Thanks to the digitized Demat account opening process, you can complete our verification from the comfort of your home. There is no need to wait for a DP agent to authorize your verification. All you have to do is simply record a video. In some cases, you may be asked to mention your name, address, PAN details, and other specific KYC information. That is all that is required to complete the verification process.
Step 6: Digitally Sign Your Application: A Simple Guide
With most depository participants allowing you to sign digitally, you can provide your signature using the Aadhaar-linked mobile number. This not only speeds up the process but also minimizes the paperwork. Once you complete the e-signature process, you can submit the completed form to open a new Demat account. After this step, you will get login details to access the account along with other specific account-related information.
Now that you are familiar with how to open a Demat account, consider important factors such as DP brokerage, charges, DP user interface, and the ease of opening an account before you choose a depository participant. Assess various features and select a DP charging you minimal account maintenance fees and brokerage charges to help you initiate smooth and hassle-free transactions.
