Demat Account is your entry point to start investing in share markets. Share Markets work in a complete digital ecosystem and the shares are traded on an exchange in their dematerialized form. The dematerialized form is nothing but the digital version of the shares.
Benefit of Demat Account
In the past, before computerized trading, shares existed as paper certificates. Trading in shares involved lengthy paperwork, and transfer of shares involved costs and took time as they had to be posted or couriered. All these involved risks such as loss of shares, damage or forging of shares, or even theft. Thankfully, with Demat Account, all these risks have been eliminated. Shares can now be stored digitally in Demat Account. It can be held securely and transferred conveniently saving time and money.
How to open Demat Account
Every new trader has the most common question in their mind that How to open Demat account To get the answer, need to approach a stockbroker registered with SEBI and the stock exchange. You need to complete an account opening form that will ask for your basic details like name, mobile number, address, PAN, and bank details. Following this, a few documents need to be uploaded before your account can be opened.
Several stockbrokers now provide the option to complete the account opening process online without leaving your home. You can open your account by uploading soft copies of the necessary documents through a phone or laptop. Even verification can be done by the customer by recording a short video of himself/herself and submitting it to the stockbroker.
Documents Required For Demat Account Opening
If you keep the soft-copies of documents handy, you can complete the account opening process smoothly in less than 10-15 minutes. Here we present the list of all documents needed to open Demat account. It doesn’t matter which stockbroker you choose, the documents will mostly be the same.
- PAN Card: PAN Card is essential to open a Demat Account. Any broker will ask you to enter the PAN number in the 1st step while opening an account. Make sure your PAN is a valid one with a clear picture of you, your signature, and your date of birth.
- Photograph: Your passport size photograph is needed for the application. While on the online medium you can keep a soft copy of passport photograph, for offline medium, you should keep 3-4 photographs handy.
- Proof of Address: Proof of Address document is also mandatory for opening a Demat account. You can choose from the following documents for proof of address: Valid Passport, Aadhar Card, Valid Driving License, Voter ID Card, Utility Bills (e.g. Electricity bill) not more than 3months old, 3-month bank statement,
- Proof of identity: Your PAN Card with a clear photograph can serve as the identity proof and your stockbroker may not ask for separate identity proof. However, as the case may be, apart from PAN card, the following documents can be used as proof of identity: Aadhar, Valid Passport, Voter ID Card, Valid Driving License, Identity card issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council, etc., to their Members; and Credit cards/Debit cards issued by Banks/NREGA Job Card.
- Bank Proof: Bank Proof is needed to link the bank account with your Demat-cum-trading account. The acceptable documents are Cancelled cheque, Bank Passbook, and latest bank statement. They should have IFSC code and account number clearly mentioned.
- Signature on white paper: In the online process, a scanned copy of your signature will be required. Make sure that the signature matches that on the PAN card.
That’s it! These documents in your possession before sign up can ease the form filling process and you can open account in minutes. Since stockbrokers offer Demat cum Trading Accounts, they may also ask you to submit income proof if you choose to trade in Futures and Options. The documents for income proof can include- 3 Month salary slip, a 6-month bank statement, Net worth Report, Holding Report, Income Tax Return (ITR) and Demat Holding Statement.
Why delay any further, open your Demat and trading account today and start investing in share markets.
Disclaimer: Investments in securities market are subject to market risk, read all the related documents carefully before investing.