Last Updated: Mar 21, 2024 Value Broking 6 Mins 1.8K

The first question pops up: “Can I transfer shares from one Demat account to another? The answer is “YES,” and the Demat account has changed the way of trading worldwide.  Now you can trade online without the need for any physical certificates. This massive step of digitising trading has significantly impacted the Indian stock market as more people now seem to be interested in trading and investing. Online trading reduces complexities present in physical trading and offers privacy and security. Every investor knows that opening a Demat account is essential to trade in the stock market. Without a Demat account, one cannot trade or invest in stocks or funds. 

A Demat account is also known as a Dematerialized account and holds all your securities, stocks, shares, bonds, and funds electronically. It is in an electronic format. This works like your bank account, except that the Demat account holds securities in digital form instead of money. You also need a trading account to trade in the stock market; to place buy or sell orders in the stock market. 

An investor can open multiple accounts and keep their shares in different Demat accounts. A Demat account holds securities electronically and facilitates transfers of shares to another Demat account. There are many reasons why people prefer to transfer shares from one Demat account to another.

Why Should You Transfer Shares From One Demat Account to Another?

Some situations may arise where investors want to move their shares to another Demat account.  A few possible reasons why investors may choose to shift their shares are explored here in detail:

  1. One of the possible reasons could be asset consolidation. To bring or place all assets under one roof for better management. 
  2. In the beginning, investors may like to try different brokers to learn about their services. Later they choose the brokers that help them with their financial goals and investment strategies. 
  3. Another reason could be to choose the depository participant that gives better returns at a lower cost than the previous one. So this requires you to shift all your shares from the last account to the new broker’s Demat account.
  4. Discount brokers and full-service brokers are two different types of brokerage available. A discount broker provides limited services with limited services. Whereas a full service charges higher fees, they offer full-fledged services and better facilities to simplify transactions. As a result, some investors may want to change their investment strategies, requiring a shift from one type of broker to another.

Participants in the Demat Account Opening Process

Before discussing the steps involved in transferring shares from one Demat account to another, let us know who is interested in these processes. 

  1. Present Broker or depository participant
  2. Investor
  3. New Broker
  4. Depository, i.e., NSDL and CDSL

National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) are India’s depositories registered with the government and regulated by SEBI. These two depositories hold multiple forms of securities like stocks, bonds, and ETFs for millions of stock market investors in an electronic format. So, you understood the reasons behind moving shares from one Dematerialized account to another. But the thing is now the way to move shares from one Dematerialized account to another. 

How Can I Transfer Shares From One Demat Account to Another?

These are two ways by which you can transfer your shares/stocks from one Demat account to another.

  1. Manual method
  2. Online Method

Suppose both the Demat accounts are in the same depository. Then such a transfer of shares within the depository is called off-market or Intra-depository transfer. Whereas when two Demat accounts are in separate depositories, the transfer is called an Inter-depository market.

How to Move Shares From One Demat Account to Another Manually?

This mode of transfer involves physical forms. First, the investor must get a broker’s delivery instruction slip (DIS). You have to write the names and the ISIN number of the stocks, equities, etc., that you wish to shift from one account to another Demat account. 

The fields in the DIS slip are:

DP Name

You have to write the name of the depository participant, which can be a stockbroker, bank, etc. 

ISIN number

International Securities Identification Number is a 12 digit code used to identify individual financial securities. You have to enter this number carefully.

Target Client ID

It is a 16 digit ID of the broker that combines the client’s ID with the DP’s ID. 

Mode of transfer

Choose the method of transfer. For example, if you want to do an inter-depository transfer, then select the inter-depository option. For intra-depository transfer, you have to choose off-market.

After filling in the DIS slip, submit the slip to the broker. The broker will charge some fee for this transfer. Your shares will get transferred to another Demat account within 3 to 5 days. 

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How to Transfer Shares from One Demat Account to Another Demat Account – Online Method?

One can also transfer their holdings from one Demat account into an Online Demat Account. Following are the steps to transfer shares from one Demat to another:

  1. Visit the CDSL or NSDL websites and click on the ‘register online link.’.
  2. Choose the EASIEST option. This feature facilitates the safe and secure transfer of shares from one Demat account to another online.
  3. Fill out the form that appears on the screen, and then take the printout of the form and submit it to the depository participant.
  4. The DP will carry out the further proceedings and verify your form.
  5. After verification, they will send a password to your registered email address.
  6. You can use this password to log in to the account, and the investors themselves can initiate transferring of shares.

Conclusion

Transferring shares or any holdings from one Demat account to another is now simpler. You can request the transfer anytime and from anywhere with the online transfer.