Demat accounts are now compulsory for all investors trading in the securities market. You can hold a maximum of five demat accounts. Such accounts come with their own annual fees and maintenance charges. So, it is wise for investors to close any zero balance or inactive demat accounts that they currently hold.
You can open a demat account online but closing one is a different process altogether. Read on to know how to close demat account.
What Is The Process To Close Demat Account?
You need to take the following steps to close demat account:
- First, you will need a closure form. You can download it from the depository participant’s (DP’s) website.
- Now, fill in the form and submit it along with your Know Your Customer KYC documents. These include proofs of identification and address. Submit the form and documents to the nearest DP’s branch. You could also send them to the DP’s Head Office.
Read more: How to open a demat account
What Are The Details That Need To Be Mentioned When Closing A Demat Account?
You must mention the following details while submitting your closure form:
- DP IDand client ID
- KYC details like name and address. These should be in line with the records.
- Reason for closing the demat account.
- Is there more than one person holding the demat account? Then, all holders must sign the closure form.
Steps To Open Demat Account
Seamlessly open your Demat account with our step-by-step guide. Know More
How To Close A Demat Account In Case Of Remaining Balance Or Holdings
You must ensure that you have settled all payments before closing your demat account. Also, see that the account in question does not hold any securities. Suppose there are securities still held in the account. Then, you can take the following steps to close it:
- Download the closure form from the DP’s website and fill it in.
- Fill in the delivery instruction slip (DIS) to transfer the remaining securities held in the account to another demat account.
- Get the target DP’s original client master list (CML). Also, get the relevant stamp, signature, and logo.
- Submit the closure form along with the DIS, CML, and other necessary documents. You can submit them to the DP’s Head Office or nearest branch.
Read more: Documents required for a demat account
How Long Does It Take To Close A Demat Account?
You first need to submit the closure form and required documents. Then, it takes 7–10 working days to close the account.
What Are The Closing Process Charges?
You do not have to pay any charges for closing your demat account.
Remember the following points before closing your demat account:
- The account should be empty. You should not be holding any shares in it. If you are, you need to transfer them to another demat account you hold. Or, you could sell the shares.
- The balance should be zero. If the account has a negative balance, you have to settle it before closing.
- Return unused DIS booklet to the DP along with a closure letter.
- International securities identification numbers (ISINs) are IDs specific to a company’s shares. Dead ISINs belong to companies whose shares are not traded any longer in the stock market. Does the demat account you wish to close hold dead ISINs? Then, you need to apply to your DP for their dematerialisation. Your DP will forward the request to the concerned depository who will inform the registrar. The registrar will then take steps to dematerialise the shares.
Read more: Conclusion of demat account
What Is The Process Of Transferring Shares From One Demat Account To Another?
India has two national depositories:
- National Securities Depositories Limited (NSDL)
- Central Depository Services Limited (CDSL)
Transfers within NDSL or CDSL accounts are intra-depository transfers. You will need to use Intra Depository Instruction Slips (Intra DIS) for these.
Transfers between NDSL and CDSL accounts are inter-depository transfers. You will need to use Inter Depository Instruction Slips (Inter DIS) for these.
Fill in the relevant DIS depending on the type of transfer. You must mention the names of the shares you wish to transfer along with their ISINs. You will also have to mention the target client ID. The target client ID consists of a 16-character code made up of the DP ID and the client ID.
If it is an intra-depository transfer, choose the ‘Off Market Transfer’ option. For an inter-depository transfer, you must choose the ‘Inter-Depository’ option.
Do not let unnecessary charges on inactive demat accounts drain your finances. Let your money work for you by opening and maintaining proper demat accounts. If you wish to start investing in shares, you could open a demat account through Kotak Securities, among others.
Read More: Informative report on demat account
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