Demat account: How to Open Account for Share Market in India Online

In the world of endless opportunities, there are various ways of earning a premium to the amount sitting idle either in your bank account or in the form of cash. Either you can buy a residential flat or land in the form of a property Or maybe choose to invest in a business on your own and enjoy your capital gain. You can also choose to buy an FD or a PPF etc. There are many ways to invest and among them is the share market. 

According to me, the Share market is the most hassle-free way of investing that can be done just by sitting on the couch in your leisure way or from the remotest of places that just have an Internet connection. Also, the capital gain that can be achieved from the share market is too overwhelming, it can even beat the annual growth of a land property.

So friends, to enter the world of the stock market one needs a demat account. The demat account can be created online as well as offline. Well in today’s time, the most preferable way is to choose the online section as everyone today is blessed with a smartphone along with a quality Internet provider. But don’t worry in this blog, we will cover the offline section too.

So how do we create a demat account? 

Before going through the procedure of the account opening, we must understand what a Demat account is. And how does it work? Let’s find out.

What is a Demat Account and How Does it Work?

In India, approximately two decades ago, trading used to be conducted physically. Due to this, there was a major limitation in the acknowledgment of the stock market and trading to the masses. Only a limited number of people were investing and trading in India. majority of people were either unaware or were afraid to put their money into the stock market as they could have been scammed easily. 

In 1996, the Security Exchange Board of India (SEBI) introduced something that completely transformed the way people invested. Demat account also known as Dematerialised account, a digital process was introduced, enabling the ease of investing for both the laypeople as well as the existing ones. Eventually, this created a surge where more and more people came forward minimizing the hoax that befitted the minds of Indians.

A Demat account electronically holds your shares and other securities like Initial Public Offerings (IPOs), Bonds, Government securities, Mutual Fund units, and Exchange Traded Funds (ETFs). 

An Individual who wants to Invest or trade in the stock market must enter by creating a Demat account through a Depository Participant (DP). This account can be accessed from anywhere, making it quite easy to trade. The earlier manual given physical shared certificates gets updated into digital format. 

Procedure for Opening A Demat Account Online 

Step 1: Choose a DP Website

Look for a depository participant website that is best in the market to experience the quality of services and support.

Step 2: Choose the Option “Sign Up” 

After choosing the DP website of your liking, select the option “sign up”. Fill in your email ID or phone number as per the on-screen instructions to create a sign-in.

Step 3: Fill out the Account Opening Form with Basic Details

Once signed in, fill out the account opening form which would require basic details such as your Name, Phone Number, Email Address, Address, etc. Please keep your PAN Card close to you as you would need to add the PAN Card details too for the government to keep track of your earnings through this platform.

Step 4: Addition of Bank Details

Coming on to the next step, one would be required to add Bank details like account number, bank name, account type, IFSC code, etc. The addition of a bank account is required as funds deposition and withdrawal would be done digitally. Also, you might be eligible for getting credited with dividends, interest, etc by the issuer company whose shares would be present in your holdings

Step 4: Documentation Upload

 You would be required to upload a photo of your PAN Card, address proof, Identity Proof, and bank statements along with a photo of your face.

Step 5: Finish the E-KYC Process, Digitally Authenticate your KYC Information

Perform verification by yourself at your home as the whole process is digitized. So there is no requirement to wait for an agent from the depository participant to visit you and confirm your identity. Within this digitized process, either you might need to record a video of yourself reading out the given script or you might be given a numerical code that you can write on blank paper and upload a photo of yours while holding it in your hands

Step 6: E-Sign

These days most DPs provide you with a quick easy-peasy option of signing your application digitally using an Aadhar-linked mobile number. It is an absolute, secure, and convenient method that eventually reduces the paperwork.

Step 7: Form Submission 

After completion of all the steps mentioned above, you can submit your form and your demat account will be created. Once created, you will receive all your details related to your demat account like the Unique Demat Account Number, and the login credentials via your mentioned email ID.


How to Open a Demat Account Offline?

Step 1: Choose a Depository Participant (DP) 

When coming on an off-line process to choose a depository participant for the demat account opening process one needs to visit various licensed banks, financial institutions, or a broker to compare their brokerage fees, yearly fees, and leverage provided. once enquired, you can decide which DP would be the most suitable for you.

Step 2: Carry the Required Documents to your Shortlisted DP

After finalizing the DP according to your requirements. Take all the required documents. Attached them with the account opening form I.e, 

o   A photocopy of PAN Card

o   A copy of residence proof

o   ID proof copy

o   Passport size photos

Step 3: Signing and Submitting Contract

Later, you must sign the contract after reading all the rules, regulations, restrictions, and rights that come with having a demat account with that particular DP. After that, an authorise person will sign the documents and hand over your copy of it.

Note: Read all the documents thoroughly and feel free to ask if you have any queries

Step 4: Unique Client ID

Once your account is created, the DP will provide you with a unique client ID which will help you in accessing your account.

Step 5: Instruction Catalogue

The DP will also provide you with a catalog with instructions that you might use for depository services like purchase transfer and so on.

Types of charges associated with opening a demat account

Every stockbroker levies different charges for Demat account opening and for availing associated services. It varies from one broker to another. Therefore, it becomes crucial to choose the right broker where you are required to pay the minimal charges for the services.

Broker platform charges can be categorized as below:

o   Account opening fee: The account opening fee is only charged one time i.e., menu open, open your demat account for the first time. After that, no account opening charges will be charged forever.

o   Annual maintenance fee: An annual maintenance fee is charged every year by the DP for maintaining the demat account of the users.

o   Pledging charge: it is a fee charged by the broker if a trader pledges securities in the Demat account to avail more trading amount 

o   Unpledging charge: When we unpledged the shares that were pledged for trading purposes, a certain amount needs to be paid

o   DP Charges: ni charge is applicable every time and ISIN(International Securities Identification  Numbering System) is debited from the Demat account.

Note: Few stock brokers choose not to charge an account opening fee instead they provide a subscription pack that gives investors the option to choose differential brokerage rates while trading.



Decades earlier when securities were held as papers, making it unreliable to fraud, vulnerable to theft, and very easy to displace. So the introduction of an online demat account acted as a boon for investors and traders, where they could invest as well as trade with a free mind irrespective of any threats of losing any of the shares and securities to the fraudulent.



Post a Comment

Previous Post Next Post