This is why you need a Demat Account!

• QHow does a demat account work?
  A

  Demat account is a facility that allows investors to hold shares in an electronic format. The full form of demat account is dematerialised account.

  A demat account functions like a bank account for shares. In a bank account, you do not hold cash physically. Your bank balance appears as a mere entry in your bank statement. The same way, in a demat account, you hold shares in a dematerialised or electronic form for better accessibility. These shares are debited or credited from the demat account when you trade. Know more about demat account here.

• QWhat are the types of demat account?
  A

  There are three types of demat accounts for different investors:

  • Regular Demat Account: This is for Indian citizens who reside in the country.
  • Repatriable Demat Account: This type of demat account is for non-resident Indians (NRIs) who want to transfer money abroad. It needs to be linked to an Non-Resident External (NRE) bank account.
  • Non-Repatriable Demat Account: This account is also meant for NRIs, but does not allow fund transfers abroad. It has to be linked to an Non-Resident Ordinary (NRO) bank account.

  Explore the different types of demat accounts here.

• QCan I open a demat account without opening a trading account?
  A

  For the purpose of investing, one needs to have a demat account and a trading account. A demat account is a close cousin of the trading account, without which the demat account is merely a storehouse for securities in digital form. Through a trading account, you can invest in stocks, IPOs, bonds, etc., and hold them all in a demat account. Know the difference between a trading and demat account in more detail.

  There can be many advantages to opening a demat and trading account together.Know more!

• QIs the demat account part of a 3-in-1 account?
  A

  Yes, the demat account is a part of the 3-in-1 account which includes a bank account with Kotak Mahindra Bank and a trading and demat account with Kotak Securities. The 3-in-1 account gives you ‘direct access’. So you don’t have to manually transfer money from your savings to your trading account in order to trade online. Explore the perks of opening Kotak’s 3-in-1 account!

• QIs it necessary to link a trading account to a demat account?
  A

  No, it is not necessary to link a trading account to a demat account. You can hold one or more demat accounts that are not linked to a trading account.

  However, linking a demat account with your trading account is essential to trade in the cash market. For example, to buy shares, you will need to place the order and dispense funds from the trading account. Once the order is processed, the shares will appear in your demat account. Some brokers offer both demat and trading accounts together for a seamless trading experience.

• QCan I link my new trading account with a demat account?
  A

  Yes, you can link your new trading account with a demat account. It is also possible to link multiple demat accounts with a single trading account.

  Linking the accounts is mandatory if you trade in the cash segment. For example, to buy shares, you will need to place the order and dispense funds from the trading account. Once the order is processed, the shares will appear in your demat account.

  In general, it is recommended to link your trading and demat accounts. That way you need not provide your demat account details for every transaction. Once an order is processed, the shares will be either deposited in or debited from the linked demat account. Know more about using a trading and demat account here.

• QWhat are the charges of a demat account?
  A

  The charges of a demat account are: safety charges (custodian fee), annual maintenance charges, and transaction charges. Know more about the competitive brokerage charges of Kotak Securities here.

• QCan I open a demat account for free? Are there any other charges?
  A

  Yes, you can open a demat account for free. However, there might be other charges applicable once the account is opened. These could be: safety charges (custodian fee), annual maintenance charges, and transaction charges. Know how to choose the best demat account for you here. Explore the competitive brokerage charges of Kotak Securities demat account.

• QCan I have multiple demat accounts?
  A

  Yes, it is perfectly okay to have multiple demat accounts. The only condition is that you cannot have multiple demat accounts with the same broker or depository participant. Know all you need to about demat account features, advantages, and uses.

• QWho can open a demat account in India?
  A

  A demat account can be opened by anyone with valid documents. This includes resident Indians, minors (through guardians), non-resident Indians, foreign nationals, and firms. However, the process and conditions might be different in each case.

• QHow long does it take to open demat account?
  A

  It takes a few days to open a demat account. The steps involved include submitting the account opening form with the required documents and completing the in-person verification. Our representatives are here to help! Sign up here for an instant call to open a demat account.

• QWhich are the most important features of a demat account?
  A

  The key features of a demat account are: easy access to holdings, easy dematerialisation of securities, ease of receiving dividends, easy share transfers, liquidity of shares, and availability of loans against securities. Know about more advantages and features of a demat account here.

• QWhat will happen after I submit my application?
  A

  After you submit your application to open a demat account, you will be requested to complete an in-person verification by a representative of the depository participant. Your personal details will be collected and the documents verified against the originals. Your account number will be issued after the verification. Know about the demat account opening process in depth here.

• QHow can I use a demat account?
  A

  A demat account is an online platform that stores your securities in electronic form. Once you link your demat account with a trading account, you can buy and sell securities online.
  To use a demat account, you will need the account number or client ID, along with a password. Since the account acts as a storehouse for all your securities, you can monitor your holdings by logging in to the account. You can also get a statement of your entire portfolio through the demat account. Know about the extensive uses of a demat account here

• QWhat next after I log in to my demat account?
  A

  After you login to your demat account, you can view all security holdings and access your portfolio statement. You could also check on the status of recent transactions based on securities deposited in or debited from your account. Know how to trade online using trading and demat accounts.

• QCan you open a demat account jointly?
  A

  Yes, you can open a demat account jointly with a maximum of three account holders. To open a joint demat account, during the form filling process, ensure that the type of demat account selected is ‘joint’. Even in the case of a joint account, communications regarding the account will be provided to the first holder only. So the correspondence address on the demat form will have to be that of the first holder. The KYC documents along with supporting paperwork will have to be provided for all the joint holders while opening the account.

• QCan I transfer shares from my demat account?
  A

  You can transfer shares from one demat account to another. You will need to fill the delivery instruction slip (DIS) and submit it to your depository participant (DP) to start transferring shares. If both the DPs involved in the transfer are not associated with the same central depository (CDSL or NSDL), you will need an INTER-Depository Instruction Slip (Inter DIS). If they are, you will need an INTRA Depository Instruction Slip (Intra DIS). Read about the process in more detail here.

• QIs a demat account compulsory to invest in an IPO?
  A

  Yes, a demat account is compulsory to invest in an IPO as per SEBI guidelines.

• QDo I need a demat account to start an SIP in Mutual Funds?
  A

  You do not need a demat account to invest in mutual funds. Whether to open a demat account depends on the investor’s requirement and understanding of the product. A demat account is compulsory to trade in equity shares, but owing to the associated benefits of the demat account, depository participants have started offering access to mutual funds through the demat account.
  - Upon logging in to the demat account, you will see consolidated reports of all your investments in just a few clicks. Once you have bought mutual fund units, you can also sell them and invest in new funds without having to visit any office.
  - Alternatively, mutual funds can be bought directly from fund house websites, independent portals, mutual fund advisors, banks, and transfer agents. Know how to track, purchase, and redeem your mutual funds online with Kotak Securities.

• QCan a Non-Resident Indian open a demat account in India?
  A

  Yes, a non-resident Indian (NRI) can open a demat account in India. In the case of an NRI, there are two accounts to choose from based on the objective of using the generated funds.
  - Repatriable Demat Account: This type of demat account is for NRIs who want to transfer money abroad. It needs to be linked to a Non-Resident External (NRE) bank account.
  - Non-Repatriable Demat Account: This account is also meant for NRIs, but it does not allow fund transfers abroad. It has to be linked to a Non-Resident Ordinary (NRO) bank account.
  - Explore the different types of demat accounts here. .

• QCan I nominate someone for my demat account? If yes, who all?
  A

  Yes, nomination can be made by individuals holding single or joint demat accounts. The nominee needs to complete a few formalities with the depository participant and get the securities transferred into their account in case the account holder dies. You will be asked to choose a nominee while opening the account. Only an individual can be appointed as a nominee. Non-individual entities such as a trust, corporate body, Hindu United Family (HUF), Association of Persons (AOP), etc. cannot be appointed as nominees. Your nominee could be your legal heirs, dependents, family members, or others.

• QWhat do you mean by dematerialisation?
  A

  Dematerialisation is the process of converting physical shares into electronic format. An investor who wants to dematerialise his shares needs to open a demat account with a Depository Participant. Investor surrenders his physical shares and in turn gets electronic shares in his demat account.

  To dematerialise physical share certificates, you must take note of the ownership pattern. For example, if the shares are held jointly, you may need to open a joint demat account to dematerialise them.

• QWho is depository participant?
  A

  A depository participant (DP) is an agent of the depository. A DP is an intermediary between the depository and the investors. A DP can be a bank, financial institution, brokerage house, or similar entity. When investors transfer shares, the respective DP debits or credits the demat accounts.

• QWhat is a central depository?
  A

  A central securities depository (CSD) is a specialist financial organisation. It holds securities such as shares in certificated or uncertificated (dematerialised) form. The latter enables ownership to be transferred easily through a book entry rather than the transfer of physical certificates. There are two CSDs in India currently: Central Depository Services (India) Ltd (CDSL) and National Securities Depository Limited (NSDL).

• QHow are shares held in a demat account?
  A

  Shares are held in a demat account in such a way that they can be registered and transferred electronically. Through dematerialisation, the demat account allows for electronic transactions when shares are bought and sold. The electronic certificates for stocks and other securities are held in a dematerialised form for seamless trade.

• QWhat is a demat account identification number?
  A

  A DP ID is a number allocated to the depository participant, whether a broking firm, bank, or other financial institution, by the CDSL and NSDL. Usually, the first eight digits of your Demat account number represent your DP ID and the last eight digits are your customer ID.

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