How to Open a Demat Account?

While reading newspaper or financial content, we often hear the term demat account but not many people know about it in detail. Trading or investing in the stock market requires a demat account. This account holds the shares and securities in an electronic form. In fact, it is the primary requirement for trading or investing in the Indian market.

A novice trader or investor often gets confused about how to open a demat account.If you too face this situation, this article will help youin knowing thedemat account opening process.

Opening a Demat Account

  • To open a demat account you must first visit the depository participant (DP) and fill the account opening form. The DP is an agent of depository. There are two depositories in India; CDSL (Central Depository Services (India) Limited) and NSDL (National Securities Depository Limited). The list of DPs can be seen on the depository’s website.
  • While filling the account opening form you must submit documents like proof of address, proof of identity, PAN card, your passport size photograph, etc.
  • After filling the form, you will be given a copy of rules and regulations that covers the terms of agreement and the charges that you will incur.
  • A member from the DP’s staff shall contact you and carry out an in-person verification to confirm the details submitted by you in the account opening form.
  • When the application is processed, the DP shall give you a client ID along with a demat account number. With these details you can access your demat account online. You can carry out transactions of purchasing or selling the shares using this ID.

One important thing to note here is, the demat account can be opened without any balance of shares. Also, no minimum balance is required in the demat account.

After learning about how to open a demat account, let us learn about the documents that would be required for demat account opening.

Documents Required for Opening Demat Account

  • Proof of Identity

Proof of identity includes driving license, passport, Aadhaar card, ration card, PAN card, etc. Proof of identity includes all the government registered documents having your photograph on it.

  • Proof of Address

Proof of address includes driving license, passport, Aadhaar card, ration card, PAN card, utility bills, bank statement, passbook, etc. Proof of address includes all government issued cards having the address of your residence on it.

  • PAN Card

To open a demat account, it is mandatory to submit the PAN card copy.

  • Proof of Income

The following documents can be submitted as a proof of income; latest salary slip, copy of acknowledgment slip of the income tax returns, form 16, certified annual account’s copy, a bank statement showing the transaction history of the past 6 months, etc.

  • Proof of Bank Account

Cancelled cheque of your bank account acts as a proof while opening a demat account.

  • Passport Size Photograph

Maximum of 3 passport size photographs are to be submitted for opening the demat account.

The above mentioned documents are to be submitted while opening a demat account. However, if you are opening a joint demat account, all the joint-holders must submit the above mentioned documents. In addition, all the joint holders must sign the account opening form.

To conclude,a demat account helps you transact in the Indian stock market without any hassles. However, before opening the demat account, you must select your broker very carefully. The broker must be able to meet all your requirements at affordable rates. Kotak Securities is one of the leaders in providing stock broking services in India. You may consider opening a demat account with Kotak Securities and make investments or trade using their services. Furthermore, their market experts are always available to assist you while trading and making investments in the Indian stock market.


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