How To Open A Demat Account: A Beginner's Guide

Introduction

Ever felt overwhelmed by the types of accounts you can open these days? Savings accounts, fixed accounts, NRI accounts, and now, Demat accounts? Let's cut through the confusion and dive into the world of Demat accounts together.

A Demat Account, short for Dematerialized Account, is like a digital locker for your shares and assets. Instead of holding physical certificates, your shares are safely stored electronically, making trading and managing your investments a breeze. Whether it's stocks, government securities, ETFs, bonds, or mutual funds, a Demat account consolidates everything in one place.

If you're ready to start trading online, the first step is to open a Demat account with a Depository Participant (DP). Let’s walk you through the process.

How to Open a Demat Account?

How to Open a Demat Account on Sharekhan App

Step 1: Download the Sharekhan App

● Go to the App Store (iOS) or Google Play Store (Android).
● Search for "Sharekhan" and download the app.

Step 2: Register on the App

● Open the Sharekhan app.
● Tap on "Open an Account" or "Register."
● Enter your mobile number and email address to receive an OTP for verification.

Step 3: Fill Out Personal Details

● Complete the registration form with your personal details such as name, date of birth, and address.
● Upload a selfie for identity verification.

Step 4: Submit KYC Documents

● Upload scanned copies of your identity proof (Aadhaar card, passport, or driving license) and address proof (utility bills or bank statements).
● Provide your PAN card and bank details, including a canceled cheque.

Step 5: eSign and Verification

● Use your Aadhaar number for e-signature to complete the KYC process.
● An OTP will be sent to your registered mobile number linked with Aadhaar for verification.

Step 6: Complete In-Person Verification (IPV)

● Follow the instructions for In-Person Verification, which might include a video call or recording a short video within the app.

Step 7: Review and Submit

● Review all the entered details and documents.
● Submit your application for final processing.

Step 8: Account Activation

● Once your documents are verified and the application is approved, you will receive a confirmation email and SMS.
● Your Demat account will be activated, and you can start trading.

How to Open a Demat Account Offline 

• Step 1: Begin by identifying a Depository Participant (DP) that offers Demat Accounts. This service is commonly provided by banks, stockbrokers, and financial institutions. 

• Step 2: Once you've selected a DP, proceed to fill out an application form. Alongside the form, submit the necessary documents, which typically include proofs of identity and address like passport, driving license, voter ID, and utility bills. 

• Step 3: Additionally, furnish other required documents such as bank details, PAN card, and a cancelled cheque. 

• Step 4: Following the validation of your documents and the approval of your account, the DP will proceed to activate your Demat Account.

By following these steps, you can easily open a Demat account on the Sharekhan app and begin your trading journey.

Key Elements of a Demat Account

1. Depository: Institutions like Central Depository of Securities Ltd. (CDSL) and National Securities Depositories Ltd. (NSDL) hold your shares electronically.
2. Depository Participant (DP): Registered under SEBI, DPs act as intermediaries between you and the depository, making transactions smooth and secure.
3. Investor: That’s you, the proud owner of the demat account and securities.
4. Unique ID: Your demat account comes with a unique 16-digit ID, ensuring efficient processing of your securities.

Opening a Demat account is straightforward and can be done online or offline.

General KYC Guidelines for Account Opening

• PAN Card: Self-attested copies are a must for all clients, including Promoters, Partners, Karta, Trustees, Whole-Time Directors, and authorized individuals.
• Document Verification: Submit self-attested documents with originals for verification, or properly attested copies if originals are not available.
• Translation: Any foreign language documents must be translated into English.
• Matching Information: Ensure the name and address on the KYC form match your documentary proof.
• Online PAN Verification: Can be done without the original card if another identity proof is provided.
• Address Proofs: Both correspondence and permanent addresses need supporting documents if they differ.
• Special Cases: Non-residents, foreign nationals, minors, and politically exposed persons have specific requirements.

Factors to Consider When Opening a Demat Account

• Fee Structure and Charges: Compare brokerage fees and other costs to find the best deal.
• Platform Features and Tools: Look for trading platforms that offer features and tools that fit your needs.
• Customer Support: Choose a broker with a reputation for prompt and helpful customer service.
• Broker Reputation and Reviews: Do your homework and read customer reviews to gauge the broker's reliability.
• Security Measures: Ensure the trading platform is secure to protect your funds and personal information.
• Financial Stability: Assess the broker’s financial health to ensure they are stable and reliable.
• Research and Analysis Tools: Make sure the broker offers tools and analysis resources for informed trading decisions.