The entire investment and trading platform in India has become digital, which is why investors have to open demat accounts. With demat trading accounts, you can seamlessly purchase, sell and transfer a wide variety of investment instruments systematically. The Securities and Exchange Board of India (SEBI) issued a decree in 1996, through which it become mandatory for all investors to conduct their investment transactions through demat accounts. Here’s how you can open your demat account.
How to open demat account– the steps you need to follow
Opening a demat account is rather simple. It can be done in four easy steps. Here is a step by step guide:
Step 1 – Select your Depository Participant
The depository participant is essentially a trading company or agent or mediator working between the investor and the 2 main depositories in India; The National Securities Depository Limited (NSDL) and The Central Securities Depository Limited (CSDL). As an investor, you must select your depository participant. Banks, share brokers and custodians are common examples of depository participants. For instance, Angel Broking Limited is a Depository Participant. The financial company serves as an agent of the aforementioned depositories and provides investment services to investors.
Step 2 – Begin the account opening formality
After choosing your depository participant, you need to open your account with them. Let’s say, you chose Angel Broking Limited to open demat account. You can either visit any branch of their office in your city with your documents or open your account online (a service offered by almost all depository participants). If you choose to open the account online, you will need to fill the application form on the website and authenticate the information provided with an OTP sent to the mobile number provided in the application form. You must enter basic information such as your name, address, contact and e-mail ID details and bank account details.
Step 3 – Attach your documents
You must now attach demat account opening documents as per the list of documents mentioned in the account opening form. You must submit self-attested photocopies of all the documents of which your Permanent Account Number (or PAN) is most essential.
Step 4 – Your documents are verified
The depository participant must ensure that you have provided truthful information in the application form. As such, background verification is conducted by your depository participant. You may also be called to the company’s office for in-person verification.
Step 4 – Your account is opened
Once the verification formality is completed, the depository participant provides you with your own unique account number. You can use this number to login to your demat account online and access your investments.
You must submit all the documents mentioned in the account opening form in order to open the account. The required documents for demat account opening are as under
2 passport size photographs and Proof of Identity documents: An ID proof document is one which has your photograph and date of birth mentioned on it. While a self-attested photocopy of your PAN Card is mandatory, you must also provide a photocopy of your Aadhaar, Voter ID, Passport or driver’s license. You also need to provide 2 passport size photographs
Proof of Address: You must provide any government authorized document bearing your permanent address. Accepted documents include your Aadhaar, Driver’s license, passport, electricity or telephone bills, ration card, bank passbook etc.
Bank account proof: Another mandatory demat account opening document is your bank account proof. You need to provide a cancelled cheque of the bank account from which you intend to conduct your demat account transactions.