Open Free Demat Account Online

Choose a Depository Participant

All India’s Depository Participants [DPs] are registered under either NSDL or CDSL. A Depository Participant (DP) bridges the gap between a Depository and an investor. A DP helps investors open their Demat accounts on any National Depositories through their platform. They allow investors to trade in the Stock Market through their platform and handle the transfer process of investors’ Securities and funds.

They provide the standard profit and loss statements regularly. Each DP provides its own set of services, and investors are free to compare and select the Depository Participant (DP) of their choice. If you are a new investor, you should be aware of Depositories in India. Such depositories are connected with every investor through Depository Participants.

The depositories are as follows:

• National Securities Depositories, Ltd.
• Central Securities Depositories Ltd. (CDSL).

It is up to the investor to decide whether they want to open demat account with Central Securities Depository Ltd [CSDL] or National Securities Depository Ltd [NDSL]. Both CDSL and NDSL provide the same benefits to the individual; the only difference between them is the market in which they operate. CDSL primarily operates the Bombay Stock Exchange [BSE], while NSDL operates [NSE]. You can open a free Demat account on such Depositories. Only you need to find out the depository participant offering free Demat account opening.

Submit demat account Opening Form

To open demat account, visit the respective platform where you have to provide your name, address, date of birth, email ID, and phone number. Kindly ensure that all the information you mention in the form is accurate. It is a must to review the form and sign it digitally.

A nominee is a person who inherits all the shares and funds of the Demat account holder when the owner of the Demat account passes away. The nominee can be anyone of your choice, but you cannot name non-individual entities like corporate, trust, etc., as your nominee.

One of the most basic requirements for adding a nominee is linking your Adhar card to your active mobile number. The Demat account holder needs to provide the ID proof of the nominee along with the nomination form. And if the nominee is underage, then you will also have to provide information about the guardian of the nominee.

The proof of ID of the nominee for the nomination form can be the following:

• Pan card
• Aadhar card
• Birth certificate

You can also submit a Passport, Voter id, or other required documents, but make sure that the document you submit for your nominee is not expired.

You must submit your Bank details for the Demat account opening. You need to give the basic information about your Bank account, like your Bank account number and IFSC code, an alpha-numeric code of 11 digits. Avoid sharing your Bank account details with others. If you have selected your Broker after knowing their background, your Bank account details are safe with them.

In the Demat account opening process, it is a must that an investor signs a Power of Attorney that allows their Depository Participant (DP) to debit the shares from their Demat account whenever the investor sells their Securities in the Stock market. However, the Power of Attorney does not give the Depository Participant (DP) complete control of the investor’s Demat account; it just grants them limited access.

Be a KYC- complaint

KYC stands for “Know your Customer or Client.” It is a standard guideline to save a financial institution from fraud. If you wish to open demat account, kindly submit all the KYC-required documents, such as your Identity proof, Address proof, Income proof, Bank account details, etc., to help your Demat account provider recognize you as a genuine investor by verifying your identity.

Verify Your Documents

The verification process is one of the most crucial steps in opening a free Demat account online, or you are paying for it. To receive your Demat account credentials, you will have to go through the verification process, which can get done online and offline. Some Demat account providers will conduct online verification, while others will conduct in-person investor verification.

The requirements for the verification process can be different for every other Demat account provider, but once you are through with this process, you will receive your Demat account credentials.

Fill out an Account Opening Form

Visit the head office or the nearest office of the Demat account provider you have chosen and take the Demat account opening form. Fill in all the details mentioned in the form, such as your name, residential address, date of birth, email ID, and phone number.

Attach your passport-sized photograph to the form, and sign it. When the form is filled, take it to the office of your Demat account provider and submit it there. Some providers may allow you to download the Demat account opening form online from their website and then submit a Hard copy of it.

Fill out a Nomination Form

Suppose any unexpected situation happens to you, and you already have a nominee for your Demat account. In that case, you can be confident that they will be able to claim the Securities you have in your Demat account without facing much trouble. So you will have to submit the nomination form to appoint a nominee where you have to fill in your details and the nominees’ details.

You will also have to provide the Identity proof of the nominee. You can visit the website of your Demat account provider or directly visit their office to get the nomination form.

The following are the documents for the nominee that can be submitted as their Identity proof:

• Birth certificate
• PAN card
• Aadhar card
• Driving license
• Voter ID card

If the nominee is underage, you will also have to give the details of the nominee’s guardian.

Fill Out and Sign a Power of Attorney Form

You can take the Hard copy of the Power of Attorney form from your Demat account provider, sign it, and then submit it to them. This Power of Attorney will allow your DP limited access to your Demat account through which they will be able to debit the Securities from your Demat account whenever you sell them in the Stock market.

Submit Your Bank Details

The Bank details are crucial for the Demat account opening process. You will have to give your bank details to your Demat account provider, from where they will be able to deduct the brokerage charges and the account opening fees without causing you trouble with Physical cash.

You can submit the cancelled cheque of your active Bank account, which includes information like your IFSC code, Bank account number, the account holder’s name, etc., to your provider.

Complete Know-your-customer (KYC)

Know your customer or client [KYC] is a method of protecting financial institutions from various types of capital fraud. You’ll have to submit all the requested details to your Demat account provider in this process. Here are the following documents:

• Your Proof of identity.
• Your Bank account information
• Your Residential address
• Your Proof of income.

You will have to submit a Hard copy of all these documents to your Demat account provider, which will ultimately help them identify you as a genuine investor.

Submit All Your Documents

The offline method to open demat account may seem more hectic than the online method, but some investors find it more convenient than the online method. As you have already noted, in the offline mode to open demat account, you will have to fill out all the forms and courier them to a nearby registered branch office of the depository participant (DP). Always ensure that all of the documents you are submitting are appropriately filled out with accurate information, and none of them has expired.

Complete Verification Process

Once the registered office receives your documents, they will verify whether you have the correct documents and accurate information about yourself. m. Make sure to present valid documents and accurate information about yourself. You may even call for an in-person verification [IPV], where your Broker personally verifies you and your documents. If the verification process is successful, you will receive all your Demat account credentials.

Note: You have to download an Account opening form, Nomination form, Power of Attorney form, & KYC form from the respective Depository Participant (DP) and print out all the forms

You can visit the registered office and ask them to complete the documentation process on your behalf.

Benefits of Demat Account

Mentioned below are the benefits of demat account.

Lower Risk

There were various risks associated with physical shares early. After the advent of Dematerialization, various risks get eliminated during postage. Such risks are like loss and damage of shares. The chance of theft and forgery to Securities has also ended. Now it’s completely safe and secure to store and transfer your Securities with demat account.

Easy Holding

Demat accounts store various Securities such as Equity, Government Bonds, Debentures, Sovereign Gold Bond, Exchange Traded Funds, Preference Shares, Treasury bills, Commercial Papers, Certificates of Deposits, Capitals Gains & Tax-Free Bonds, Mutual Funds, etc. It’s a one-stop place to keep all your Securities. You can manage all your Securities easily under the same roof. You can store and transfer your securities within a few clicks.

Odd Lots

Initially, it was difficult to buy a random number of physical shares. You could only purchase a fixed number of physical shares as it was easy to issue. With the help of demat account, you can easily purchase any number of shares. There are no minimum or maximum requirements that you need to fulfil. If you choose to purchase a large number of shares, let’s say 100 or 100+, there’s no requirement for you to purchase shares multiple times. After you purchase, they will be automatically deposited in your Demat account.

Reduced Costs

There were various charges associated with issuing physical Securities like Stamp Duty, Handling charges, Postage and transportation costs, Paperwork Charges, etc. These charges aren’t that huge, but if you carry out multiple trades, these charges could add up and eat up a significant portion of your returns. With the incorporation of the Demat account system, these charges have been reduced significantly. You don’t have to pay for handling and postage charges. Apart from this, any charges related to paperwork get entirely eradicated, and all you have to pay is a small percentage as a Stamp Duty Charge. As compared to Physical trading, Online trading is affordable.

Reduced Time

Initially, the settlement duration was approximately 14 days. So it was a long and tedious process for one to receive shares after placing an order or money after selling your Demat account providers and shares. Now, the duration has come down to about two days. You can buy a sell, especially immediately, and you receive the shares or the money as per your respective order within a short time. It saves investors a lot of time, primarily when liquidating their assets.

Easy Share Transfers

Due to digitization, there’s no necessity for posting shares to the new owner. There is an easy transfer of shares when buying or selling with the help of Delivery Instruction Slip (DIS) or Receipt Instruction Slip (RIS). There will be an automatic debit or credit after placing an order for buying or selling.

Faster Dematerialization and Rematerialisation

Dematerialisation is how shares are converted from Physical to Digital form. With the Depository Participants (DP), the process of Dematerialisation is pretty fast. Rematerialization is the process of converting Securities from Digital to Physical form. It’s a great option if you choose to close your Demat account.

Loan Against Demat account

Various lenders in India provide loans on your financial assets that you kept in your Demat account as collateral. You could be eligible to get a loan for about 80-85% of the total value of your investment portfolio. It’s a great way of getting loans if you ever need them during any emergency.

Multiple Access Points

You can access your Demat account from multiple platforms. You can use your Mobile phone, Laptop, Personal computer, or any other smart device that has a web browser on it.

Speed E-facilities

Speed e-Facility helps faster transactions because there is a quick requirement for the security instructions to get delivered to the broker’s account after its sale.

Corporate Benefits and Actions

Any action taken by the company, like issuing dividends or refunds, is reflected in a short period with a quick notification. Actions like splitting shares or issuing bonus shares are also selected automatically in your Demat account. You need to go through no extra process to receive the extra shares.

Documents Required To Opening demat account

Document submission is the most crucial stage of opening demat account. An individual who wants to be a stock market investor and share trader needs to submit all the required documents to move ahead with opening demat account. Since it is mandatory for the process, they must submit their documents to the organization or demat account provider they have chosen to open demat account with. The type of Demat account you are opening does not affect the necessity of the documents.

Because it is compulsory for the process, the aspiring investor will always need to present their documents before their organization or their Demat account provider. For instance, if you’re planning to open a free Demat account online or offline, or even paying to open it by verifying the customer’s identity, in both cases, the demand for the documents will not be compromised by your Demat account provider.

The number of documents required from an individual can change from one Demat account provider to another, but at the same time, some standard documents are always needed.

The following are some of the standard documents:

• Proof of your Identity [ Passport, the Aadhar card, the PAN card]
• The Voter Identity Card
• The State Issues Driver’s Licenses
• The National Rural Employment Guarantee Act [NREGA] Employment Card
• A government-approved Document

KYC Requirements

KYC (Know Your Customers/Clients) is a standard requirement or a guideline designed to protect financial institutions from fraud, terror financing, or money laundering. IKYC is one of the critical requirements to open a Trading or Demat account with your broker. It is also easy to trace the flow of funds because of KYC.

The process of KYC in demat account is as follows:

• Fill in the KYC form, where you will have to fill in your basic details like your name, phone number, email id, residential address, office address, etc.
• Provide your Identity proof that includes your Driving license, Aadhar card, etc.
• Submit proof of your address that includes documents like an Electricity bill, a Telephone bill, etc.
• Submit your income proof.
• Submit your Bank account proof that includes the cancelled check from your active Bank account

Although other documents, including proof of identity, proof of address, proof of income, and proof of bank account, are required, your PAN card is mandatory.

Proof of Identity

The following documents you can submit as your identity proof: a. Driving License; b. Voter ID card; c. Unique Identification Number (UID)

• Driving License: You can apply for a driving license with documents such as your Voter ID Card, Ration Card, Birth certificate, and Permanent Proof of Address like self-owned house agreement, passport, etc.
• Voter ID Card: The Voter ID Card is provided by the Election Commission of India. It is an important document, and any citizen of India who does not have a Voter ID Card is not allowed to vote in India. You will require some standard documents like your results, birth certificate, a recent passport-size photograph, along with some additional documents for a voter id card. Having a voter ID card is essential because it allows you to vote and helps in eliminating election fraud.
• Unique Identification Number (UID): A Unique Identification Number (UID) is provided to every citizen of India by the Unique Identification Authority of India on behalf of the Central Government. The number gives a unique identity to every Indian citizen, and it can be used by them whenever they’re asked for identity proof.

Proof of Address

Proof of address is required to verify the residential house of the client in India. The following documents can be submitted as proof of address:

a. the Voter ID Card; b. a New Electricity bill; c. the Passport; d. the Aadhar Card; e. the PAN Card

• Voter ID card
• Electricity Bill: It must be a new or less than three-month-old Electricity, Phone bill, or Housekeeping bill, etc.
• UnPassport: It is one of the most important documents to travel to a foreign country. A passport works as an Address proof as well as your identity proof. A passport works as an Address proof as well as your identity proof.
• Aadhar Card: Your Aadhar card is proof that you are a citizen of India. The information on your Aadhar card includes your phone number, address, and date of birth.
• PAN Card: Your PAN card works as the backbone of all financial transactions, and every taxpayer must have a PAN card.

Proof of Income

Submit a copy of your ITR Acknowledgement, etc., to verify your income and determine whether you can pay. It is necessary to trade in derivatives like futures and options (F and Os). You can submit the following documents as your proof of income:

• Tax certificate
• Salary slip

Proof of Bank Account

You have to submit a cancelled cheque to provide your bank details, such as the bank account holder’s name, Bank account number, and your IFSC code to confirm whether you have your own Bank account, which is required for transactions.

PAN Card

It is one of the most critical documents for opening demat account. Since the people of India require to have their PAN card to carry out all financial transactions in India. The Securities and Exchange Board of India [SEBI] made it mandatory to provide an original PAN card when opening demat account.

In conclusion, if you wish to be an investor or trader in the stock market, you will need a Demat account, as it holds your shares and other securities that you purchase from the Stock market.

While submitting documents for opening demat account, you have to ensure that none of them has crossed their expiry date and that they are all valid and appropriate for the submission.