How to open Demat Account for investment

 

How to open Demat Account for investment is now a days very common question among new investors. New investors particularly the young and the people who just started earning now concentrating on Mutual Fund Investment and direct equity investment the demat Account.

Now in this article we are going to understand the Step-by-Step Guide to Open Free Demat Account for investment. This will start from How to open Demat Account for investment to document required to open demat Account for investment. 

(Trading and Demat Account) 

In our Demat Account Opening Guide, we will guide you how to open a Demat Account for investment and the  process of opening a Demat account. The Demat account is used to trade and investment in share and other tradable financial instruments and apply for IPO as well.

What is a Demat Account?

Do you know what is Demat Account? and what is need of a Demat Account? The simple basic answer is, it is required to trade in the stock market, to hold mutual fund units, or to apply the IPOs or to buy ETF(Exchange Traded Fund) or any securities. Demat Account is abbreviation of dematerialized account. The Demat account is maintained both by CDSL (Central Depository Services Limited) and NSDL (National Securities Depository Limited).

As the concept physical share certificates are no more, the Demat account is mandatory to hold the stocks or mutual funds. That is the electronic form of holding the shares or mutual funds units. For Demat account holders, it requires an internet password and transaction password (TPIN)to trade in the stock market and give delivery to exchange. The securities that are traded in the Demat account will be transferred automatically to the Demat account held by CDSL Or NSDL once the transactions are confirmed and settled.

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The Demat account number consist of a unique 16-digit client id. The Demat account maintained by NSDL will be like IN000000 00000000 that starts from IN.In case of CDSL the Demat account number will be like 00000000 00000000. The first 8 letters represent the DP ID while the last 8 numbers will be the Client ID.

6 Easy Steps to Open Demat Account. 

There are 6 easy steps to open a Demat account with the stockbrokers in India. There are so many stockbrokers available in Indian market but you can choose as per your requirement and the brokerage / Demat charges.

6 Steps to open a demat Account.

1.Choose the Depository Participant (DP)

2.Submit Demat Account Opening Form

3.Fulfill KYC (Know Your Customer) Norms

4.Go through the Verification Process

5.Sign the Agreement Copies

6.Get Your BO ID Number

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There are 4 types of documents required to open a Demat account. 

(1)Identity proof

(2)Address proof

(3)Bank Account Proof

(4)Proof of your income

List of Compulsory Documents Required for Opening a Demat Account.

We have already gone through the easy steps for demat Account opening, but it requires a few documents to open a Demat account. Check the below list of documents and submit them during opening a Demat account.

Identity proof: Copy of PAN Card with recent Photo

Address proof: Voters ID, Driving License, Passport, Bank Passbook or Bank Account Statement, Aadhaar Card, Landline Telephone Bill, Electricity Bill, Ration Card. 

Bank Account Proof: Copy of Bank Account Passbook or Bank Account Statement (Not Older Than 3 Months), Copy of Cheque where name is printed. 

Proof of your income: Current Salary Slip, Income Tax Return(ITR) (Mandatory for Currency and Derivatives)

Opening a Trading Account. 

The trading account is compulsory associated account with the Demat account. One can open a trading account and Demat account with different stock brokers company but we advise opening the trading and Demat with the same broker to ensure smooth transaction. If you open trading and Demat with different brokers, it requires a complicated linking process and it would require form fill up and documentation process. The trading account will help you to buy and sell the stocks using Demat account number. If you open the trading account and demat Account with the same broker the process will have fewer steps and the broker will automatically and easily open a trading account linked with Demat Account. The trading account is chargeable as per the broker rules, better to compare with different brokers. 

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Demat Account Charges in India.

As per the current scenario, there are few brokers who provide FREE Demat Accounts and trading account. The Demat charges might vary as per the stock brokers policy. Some provide free Demat accounts opening but charge for trading accounts. Some brokers provide 1 year complete free Demat and Trading accounts. Many brokers take the charges from 99 to 999 to open a Demat account and trading account simultaneously. Based on the stockbrokers you should pay the charges accordingly. 

The minor or below 18 years person could open a Demat account but for trading, it requires guardians PAN linked with the trading and demat Account..

Where to open FREE Demat Account?

There are few stockbrokers like Upstox who provide FREE Demat Account openings. You can avail of the offer and open a Demat account as per the stockbroker exiting terms and conditions. 

Click Here to open free Demat Account 

Disclaimer: The Stock Market investments are subject to market risks, read all scheme related documents carefully before investing. All the information provided on our Portal is for education purpose only. We do not claim any facts, and figure mentioned here make necessary study.

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Happy and successful Investment leads to financial freedom.