A step-by-step guide
A Demat account is like a bank account, except it holds financial securities. It is a prerequisite for anyone who wishes to invest in the stock market .
The digital platform has simplified and quickened the process of opening a Demat. Now investors can open a functional Demat within one or two business days online.
There are three major types
Regular Demat Account, Repatriable, Non-repatriable
One can compare a depository with a bank, and it holds financial securities. In India, two agencies, namely, CDSL and NSDL, play the role of depositories A depository participant (DP) is a stockbroker.
To buy and sell securities, investors need a separate trading account. It holds financial securities for transactions, separate from assets in the Demat, which are for long term investment
The process begins with selecting a depository participant, a stockbroker. Select one with a proven record, transparent policies, and competitive charges.
Investors need to fill up the account opening form and complete the KYC norms to activate a Demat account.
IDs issued by a state/central government, Aadhaar card, Passport, Driving License, Voter Id, and PAN are accepted as valid identification documents.
To prove resident status, one must submit proof of address. Passport, Voter Id, Ration Card, Bank statement or passbook, telephone or electricity bill are some of the accepted address proof documents.
There are certain charges that investors need to pay to open and maintain a Demat account. Since charges can impact the return on investment, select a DP who offers competitive charges
When a Demat account is open, you get a 16-digit unique Demat account number, like your bank account number, which allow you to invest in the financial market.