In India, the term demat account is nothing but a dematerialized account which can be used to trade in stocks or debentures listed in the stock exchanges. Dematerialization means that all the securities and shares are stored in the account electronically instead of as physical certificates. Possession of demat account by investors is compulsory as per the guidelines from The Securities Exchange Board of India (SEBI), the country’s stock market regulator.

How to Open Demat Account

Procedure Of Opening a Demat Account

Many people who are willing to trade in the Indian stock markets are still clueless on how to open a demat account. Demat Account is supposed to be opened by an investor while being registered with a sub broker or an investment broker. The steps include:

  1. Select and approach a certified Stock Broker ShareKhan, ICICI Direct, Unicon Securities, HDFC Securities, are some certified stock brokers in the Indian stock market.
  2. Fill up the form, called demat account opening form, given by the stock broking firm.
  3. Attach copies of any one of the documents as a proof of address and a proof of identity supporting the demat account opening form, as specified in SEBI guidelines.
  4. Produce the original PAN card during the opening of demat account as mandated by SEBI.

Documents Required For Opening Demat Account

Following documents should be kept handy while opening demat account in India.

  • PAN Card

Proof of Identity – Any one of the following is required:

  • Driving license
  • Voter’s ID
  • Passport
  • Photo ration card
  • Two passport sized photographs

Proof of Address – Any one of the following is required:

  • Driving license
  • Bank Statement
  • Voter’s ID
  • Photo ration card
  • Passport
  • Photo credit card
  • Government Utility Bill (Telephone, Electricity, etc.)

Aims and Objectives of Demat Account

You stand to benefit immensely from opening a demat account. Some of the benefits of opening a demate account are –

  • Demat account is a safe and convenient way of holding securities.
  • Demat account gives immediate option for transfer of securities.
  • No stamp duty on securities’ transfer required if they are held in a demat account.
  • Demat account eliminates risks related to physical stock certificates like fake securities, bad delivery, thefts, etc.
  • Demat results in significant reduction in paperwork and transaction costs.
  • Even a single share is saleable through a demat account.
  • Address change once recorded with DP gets registered with all companies the stocks of which is held by an investor.
  • Automatic credit of shares, dividends, etc.

So if you want to invest in Indian Share Market, then open demat account right away and start availing the numerous benefits. It is easy to learn about how to open a demat account. Just surf through the website to know everything about demat account, demat account opening, demat account opening benefits, demat account charges and more.