Demat Account Opening
Opening Demat Account
Most financial planners advise & suggest that if you wish to gain from the potential of equity, then invest in shares. You can always enjoy the benefits of investment, provided you open an online brokerage or a Demat account. Having a Demat account is must to trade in India’s stock exchanges. So, if you are somebody who enjoys trading & wish to make the most use of it, then reach out your preferred bank/ financial institution to help & guide you on the various easy processes. Here is everything you need to know about setting up one.
The primary step of online trading in the equity market is creation of a DEMAT account. There is a central database of all DEMAT accounts through which you can buy or sell shares are: “Central Depository Services India Limited (CDSL) and National Securities Depository Limited (NSDL)”. But, whereas a Depository participants (DP) are the intermediary who are authorized to offer Demat services. DP can be Your Bank, Stock Broker or other financial institutions
Opening the Demat account: At the time of opening Demat account, you need to select your preferred DP & complete the details of the demat account opening form. You can make it online or reach out to a representative from the financial institution. After that complete the necessary details of the share certificates available with you & then later submit it with the physical share receipt.
- Proof of Identity: Proof of identity involves having all the required documents that will help determine your identity. Such as: Aadhar Card, PAN card, voter's ID, passport, driver's license, bank attestation, IT returns, electricity bill, telephone bill, etc.
- Proof of Address: Address proof involves those documents recognized by the government & has your registered residential address. The acceptable documents are: Aadhar Card, Passport, electricity bill, phone bill, ration card, driving license etc.
- Bank account details (A cancelled cheque for capturing the MICR)
- A recent coloured passport size photograph
Submit the copies of these documents (proof of identity & address) along with the cancelled cheque & passport photograph. Also carry the originals for verification. The representative from the DP will contact you for In-Person Verification and will check & verify the details provided in the account opening form. Once the application is processed, The DP will provide you with the demat account number and ID.
Pre-requisite of online trading
There are three key requisites for trading in the stock market:
- A bank savings account,
- Trading account and
- A DEMAT account.
Once the form is approved, your demat account will automatically be updated to reflect your newly dematerialized shares.