How to open a Demat Account

Before the demat account was introduced in India, investors were bothered with handling the paperwork involved in trading. The share certificates,held in physical certificates, were at risk of being lost or forged. The process of trading in shares was highlytedious and involved a lot of paperwork. There were delays in the delivery of the certificates,and also, the certificates had the risk of getting ink or stains on them, rendering them difficult to read.

With the introduction of the dematerialization account some twenty-five years ago, these disadvantages were removes by converting the paper certificates into electronic format. All the details of shares and other securities trades are now stored online. You cannot trade in the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) without a demat account.

Apart from the demat account,an investor who wants to trade online will need a trading account and a bank account. With the help of the trading account, you can buy and sell shares and securities on any stock exchange. The demat account holds the shares and securities you traded in an online format.

Documents needed to open a demat account

Identity proof:

Most depository participants take a permanent account number (PAN) card as the identity proof

Address proof:

You will be required to submit your address proof.This address could be your voter’s ID, rent agreement, Driver’s License, passport, Aadhaar card, landline telephone bill, electricity bill, ration card or gas bill.

Proof of your income

You need to submit a copy of your latest salary slips or your income tax return forms.

How to open a demat account

• Choose a depository participant/ brokerage
• Submit an account opening form with mandatory documents like permanent account number (PAN) card, residence proof, and identity proof like Aadhar card and passport size photos.
• Make the required payment
• Once the documents are approved, you need to sign an agreement mentioning the terms and conditions of holding a demat account.
• Receive a unique Client ID from your depository participant and instruction slips

You can also open a demat account online:

Steps to open a demat account online:

• The brokerage will direct you to the “open an account” page on their website
• Enter your mobile number registered with your Aadhar account
• Click on the GET OTP option
• You will receive a message to the provided number
• Once you enter the OTP, keep your Aadhar number, PAN card, a cancelled cheque copy, and your signature on a blank piece of paper.
• You also need to ensure that your camera/laptop webcam is working fine
• Sign in with your e-mail address
• A new page will pop open asking you for your PAN card details. You have the option to use the online guide that will provide you with step-by-step instructions on how to fill in these details.
• Fill in your PAN number and select your date of birth as per your Aadhaar card.
• You also have the option to select if you want to receive any of these updates on WhatsApp.
• You then have to link your bank account details
• Identify yourself by validating your Aadhaar
• You then enter your other details and upload all the documents mentioned above
• Finally, you have to verify your live photo and e-sign all your documents.

Once these steps are completed, you will receive a unique 16-digit client ID. The first eight digits of this ID represent the depository participant, and the last 8 are the unique identifier for the investor.

Conclusion:

While opening a demat account, you should choose a depository participant who offers you a full range of brokerage services. The trading technology used by this participant needs to conduct trade smoothly and quickly. This technology should be accessible for you to understand and offer plenty of features. You should also remember to submit all your details correctly. It is important to double-check all the details. Any corrections might lead to a rejection of your application.You should also be aware of all the charges that might come with your demat account and compare it with other depository participants to ensure you get the best deal.

Disclaimer:

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai – 400020, India, Tel No : 022 – 2288 2460, 022 – 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.