A Demat account is a short form of dematerialized account that helps store the shares, bonds, government securities and etc., in electronic form. In India, National Securities Depository Limited( NSDL) and Central Depository Services Limited (CDSL) are the two depository organizations that maintain Demat accounts and appoint depository participants such as Stock Brokers, banks, and other financial institutions act as an intermediary between depository organizations and Demat account holders. There are a total of 538 depository participants are registered till now with the Securities and Exchange Board of India (SEBI)
After the depository act of 1996, it became effortless to store shares, bonds, and government securities in digital form. One can open a Demat account online with any stockbrokers you want.
Top 5 Stock Brokers in India and their Market Share
Zerodha- 18.85 %
Upstox-10.90%
Angel Broking-8.08
ICICI Securities-7.98%
HDFC Securities-5.25%
One can open a Demat account with any of the stockbrokers they want through the online process.
Who can open a Demat Account?
Any Indian who is above 18 can hold a Demat account
What are the Documents Needed to Open a Demat Account?
- PAN Card ( Permanent Access Number)
- Last three months bank statements
- Address Proof
- Canceled Cheque
- Aadhar Card ( It should be linked with mobile number)
All the above documents are required for anyone to open a Demat account with any stockbroker through an online process. The stockbroker will do an online KYC before approving your Demat account. It usually takes 24 hours to 48 hours to open a Demat account.
Now the big question is what are the charges to open a Demat account and what is the annual maintenance fee, transaction charges, etc.
Before opening your Demat account and start buying shares or any other securities, one needs to know the charges of each stockbroker and choose the right one according to their needs and usage.
There is a huge competition between the stockbrokers right now. Previously they used to charge the same amount as annual maintenance charges, account opening charges, and transaction charges. So because of the competition, many stockbrokers are offering discounted brokerage.
Where many stockbrokers made account opening charges 0 and annual maintenance charges 0 for the first year, and they are charging transaction charges per each transaction, it would vary from 20 to 30 rupees.
Anyone who wants to open a Demat account with a stockbroker needs to check their charges properly. Otherwise, it may eat up his/ her profits.
Stockbrokers like Upstox, Groww, Angel Broking, etc., are offering discount brokerage services which are good to consider if any is looking for affordable brokerage services.
With the help of the Demat account, one can invest in Indian stock market indexes and also futures, options, and also one can do commodity trading and intraday trading . And you can apply for IPO’s through a Demat account. In simple words, you can say a Demat account is like a bank account for shares which helps you in storing them in digital format where there is no paper and physical work involved.
Can you transfer shares from one Demat account to another?
Yes, you can transfer shares from one Demat account to another. However, if the stockbroker of both the Demat accounts is the same, then the process is easy. If you want to transfer shares from a different stockbroker Demat account to yours, then it involves a lengthy process, and it can take up to one week to 10 days time.
Can you close your Demat account online?
Opening a Demat account online is very easy; however, closing a Demat account involves a lengthy procedure, and it can take up to 15 days to 1 month to close a Demat account, and it involves an offline process where you need a drop a letter regarding closing your account to your stockbroker and all.
We hope you people got some good knowledge about Demat accounts and the procedure to open them. Do let us know your thoughts on this article.
