How Do You Transfer Shares From One Demat Account To Another?

Introduction

For transferring shares from one demat account to another demat account, the investor will need to open a new account with the chosen broker. Subsequently, the investor must transfer the existing stocks from the old account to the new demat account. Let's explore how to initiate this transfer process, which can be done through two methods: online demat account transfer and offline demat account transfer.

The online demat account transfer method initiates the transfer request for stocks through the broker's online portal. The investors need to provide details such as the old demat account number, the new demat account number, and the list of securities to be transferred. 

In the offline demat account transfer, the investor needs to fill out a physical demat account transfer form provided by the new broker along with the delivery instruction slip with details regarding all the shares owned by the transfer that s/he needs to transfer to the new demat account.

Online Demat Account Transfer Process

Online transfer of shares can be done either through CDSL's 'Easiest' facility or NSDL's 'Speed-e' facility. 

Visit the CDSL (https://www.cdslindia.com/) or NSDL (https://nsdl.co.in/) website. 

1. Register for the 'Easiest' facility on CDSL or 'Speed-e' facility on NSDL.
2. Fill in the details and submit the form.
3. Send a copy of the form to your depository participant.
4. Details will be verified, and you will receive your login credentials after 1-2 days.
5. Use the credentials to log-in to the account and then transfer your shares online from your demat account.

Manual Transfer through Delivery Instruction Slip

First, you need to get a Delivery Instruction Slip (DIS) from your current stock broker. This slip contains information related to the share transfer. You will need to fill out the details to transfer the shares successfully. The details you need to fill in are as follows:

Step 1: In the DIS booklet, enter the names of the shares to be transferred using their ISIN codes. You should carefully enter this number along with the quantity of the shares.

[ISIN stands for International Securities Identification Number. This number identifies each individual share in your account.]

Step 2: The Beneficiary Broker ID needs to be entered. This is a 16-digit unique ID of the broker or banks involved in the transfer. On the slip, you must provide the ID for both your existing and new broker.

Step 3:  Mode of Transfer – If you want to do an Intra-depository transfer (i.e. transfer of shares between demat accounts registered with the same depository) , you must choose off-market. Otherwise, select the inter-depository option (i.e. transfer of shares from an account in one depository to an account in another depository).

Step 4: The last step involves signing the slip and submitting it to the existing broker. The broker will charge you for the share transfer, and the charges may vary from one broker to another.

The filled-in and signed DIS slip must be submitted to your existing broker or DP. Then, collect the acknowledgment receipt.

Reasons for transfer

There could be multiple reasons for transfer of shares. Some are stated below:

- Changing the broker: Changing the broker due to better services, lower brokerage/DP charges.
- Consolidating demat accounts: Multiple demat accounts into a single account for better management.
- Share Transfer as gift: Share transfer as gift to family members or friends.

Time required for transfer of Shares

The timeframe for transferring shares from one demat account to another depends on the transfer method (online and offline), the services of the Depository Participants (DPs), and the brokers involved.

Manual transfers can take several weeks to complete, while online transfers are generally quicker. They often reflect shares in the new demat account within a few days (3-5 days). Typically, the entire process is completed within one week.

Important Aspects for Transferring Shares

When undertaking the transfer of shares between Demat accounts, it's crucial to bear in mind the following: 

Choose a Reliable Depository Participant: Selecting a dependable DP  for the new Demat account is essential to ensure the security of your assets and facilitate a smooth transfer process.  

Verify Details: Thoroughly review all essential particulars, such as the ISIN (International Securities Identification Number), DP ID, client ID, and beneficiary account numbers. This diligence helps prevent errors or discrepancies during the transfer.  

Maintain Records: Keep records of the transfer deed, share certificates (if applicable), and any other documents linked to the transfer. This documentation is essential for transparency and can help in resolving disputes, if any, in the future.  

Monitor Transfer Progress: Proactively track the transfer progress. In case of delays or issues, promptly communicate with the depository participant.