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Chapter 1.10: How to open a Demat Account
HOW DO YOU OPEN A DEMAT ACCOUNT?
- First select the Depository Participant you want to open your demat account with. Most brokerages and financial institutions offer the service.
- Then fill up an account opening form and submit along with copies of the required documents and a passport-sized photograph. You also need to have a PAN card. Also carry the original documents for verification.
- You will be provided with a copy of the rules and regulations, the terms of the agreement and the charges that you will incur.
- During the process, an In-Person Verification would be carried out. A member of the DP’s staff would contact you to check the details provided in the account opening form.
- Once the application is processed, the DP will provide you with an account number or client ID. You can use the details to access your demat account online.
- As a demat account holder, you would need to pay some fees like the annual maintenance fee levied for maintenance of account and the transaction fee -- levied for debiting securities to and from the account on a monthly basis. These fees differ from every service provider (called a Depository Participant or DP). While some DPs charge a flat fee per transaction, others peg the fee to the transaction value, and are subject to a minimum amount. The fee also differs based on the kind of transaction (buying or selling). In addition to the other fees, the DP also charges a fee for converting the shares from the physical to the electronic form or vice-versa.
- Minimum shares: A demat account can be opened with no balance of shares. It also does not require that a minimum balance be maintained.
WHAT ARE THE DOCUMENTS REQUIRED FOR A DEMAT ACCOUNT?
You need to submit proofs of identity and address along with a passport size photograph and the account opening form. Only photocopies of the documents are required for submission, but originals are also required for verification.
Here is a broad list of documents that can be used as proofs:
Proof of identity
PAN card, voter's ID, passport, driver's license, bank attestation, IT returns, electricity bill, telephone bill, ID cards with applicant's photo issued by the central or state government and its departments, statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, colleges affiliated to universities, or professional bodies such as ICAI, ICWAI, ICSI, bar council etc.
Proof of address
Ration card, passport, voter ID card, driving license, bank passbook or bank statement, verified copies of electricity bills, residence telephone bills, leave and license agreement or agreement for sale, self-declaration by High Court or Supreme Court judges, identity card or a document with address issued by the central or state government and its departments, statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, colleges affiliated to universities and professional bodies such as ICAI, ICWAI, Bar Council etc.
Now that you know all about dematerialization and demat accounts, read about trading accounts – a must have for investing in the share market – and how they differ from a demat account. Click here.
If you are looking to open a demat account with Kotak Securities, click here.