What is a Demat Account?
A Demat account is an account that holds the shares you purchase in an electronic or dematerialized form. Just like a bank account holds your money, a Demat account holds your financial certificates of instruments like bonds, shares, government securities, mutual funds, and exchange-traded funds.
How to open a Demat Account?
Step 1: Select a depository participant (DP)
Most financial institutions and brokerage service firms, including Indiabulls Ventures, are Depository Participants.
Step 2: Fill an account opening form
You are required to fill an account opening form to open a Demat account. This includes basic biographical and contact information.
Step 3: Submit documents for verification
You need to submit a copy of your income proof, identity proof, address proof, active bank account proof & one passport sized photograph for verification. All copies of documents need to be duly attested.
Step 4: Sign standardized agreement with the DP
Step 5: Verification of documents
A staff member from the DP will verify all the documents that you have submitted in your application.
Step 6: Demat account number and ID is generated
Once all your documents have been verified, your Demat account number and ID will be generated. You can use this information to access your online Demat account.
Demat account services are provided by depositories. In India, there are two depositories, National Securities Depositories Limited (NSDL) and Central Securities Depositories Limited (CSDL). These depositories provide the services through intermediaries, a broker or a depository participant like Indiabulls Ventures.
Advantages of Opening an Online Demat Account:
The mere existence of a demat account is to make your life easier. There are many advantages of an online demat account. They are as follows:
● No Risks
A demat account is a safe way to hold all your securities. An online demat account saves you from risks such as loss of physical certificates, forgery, bad delivery, damage to certificates, thefts, delays, etc.
A demat account ensures that you get an immediate transfer of securities, automatic credit of shares which can be because of bonus, split, consolidation, mergers, etc.
● Absolutely No Paperwork
All the certificates received through buy or selling of shares are saved in the electronic form. This makes a demat account more handy than physically handing over certificates to buyers or sellers.
● No Additional or Hidden Cost
Handling expenses, stamp duty, etc., are additional costs that you may have to incur when dealing in securities physically. All of this is eliminated when you open a demat account. It doesn’t require any stamp duty for the transfer of securities. The maintenance fee and brokerage charges are known beforehand. Hence there are no hidden charges.
Some frequently asked questions on Demat Account:
Can I open more than one Demat account under the same name?
Yes, you can open more than one Demat account under the same name. You can open the account with the existing depository or can choose a different depository. Every time you open a new account you have to give the depository the Know Your Customer (KYC) details.
Does a Demat account require minimum balance?
No. A Demat account does not require a minimum balance. You can also open a Demat account without any shares.
How can I transfer shares from one account to another?
You can transfer the shares either offline or online. Online transfer of shares can be done via the Central Depository Services Limited website. In case of offline share transfer, you need to keep in mind that the shares are held by a depository. If the new and existing brokers are associated with the same depository, then it will be an Intra-depository transfer also known as the off-market transfer. In case of brokers being from different depositories then the transfer will be an Inter-Depository transfer.
How to link the Demat account to Aadhar?
To link your Demat account to your Aadhar, you need to visit the NSDL website. You will find a link named ‘Aadhar Number to Demat Account’. Enter the name of your depository, their ID, client ID, and PAN details. Next, enter the OTP password received. Now you enter your Aadhar details in the new link. You will receive an OTP on the Aadhar registered number. Click on submit after entering the OTP.
Read more frequently asked questions for demat account here:https://www.indiabullsventures.com/blog/demat-account/frequently-asked-questions-on-demat-account
Indiabulls Ventures is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of Dematerialised shares. Indiabulls performs clearing services for all securities transactions through its accounts. We offer depository services to create a seamless transaction platform – execute trades through Indiabulls Ventures Limited and settle these transactions through the Indiabulls Depository Services. Indiabulls Depository Services is part of our value added services for our clients that create multiple interfaces with the client and provide for a solution that takes care of all your needs.