A Demat account is where an investor holds their shares and securities. It is like a bank account to hold the bonds, shares, exchange-traded funds (ETFs), mutual funds, and government securities.
A Demat account is also known as a Dematerialized Account as you can hold the shares and securities in an electronic format. Having a Demat Account is better as there is no chance of your share certificates being damaged externally or getting stolen.
What Are The Documents Required To Open a Demat Account?
While opening a Demat account online you need the following documents:
- A Proof of identity with a valid photograph (Aadhar Card/Voter Card/Driving License/Passport).
- A Proof of address (Passport/Driving License/Any Utility Bill not older than 3 months/Ration Card/Voter Card/Copy of your bank statement not older than 3 months).
- A Proof of Income for trading in Derivatives ( Recent salary slip/Form 16/Copy of your ITR).
Other Documents Include:
- Canceled Cheque of any scheduled commercial bank in India
- Valid Photograph
- Signature on a White Paper
What Is The Process Of Demat Account Opening?
The account opening procedure includes:
- Choose your Depository Participant (CDSL/NDSL)
- Fill up the Demat account Form
- Do your KYC verification
- In-person verification
- Sign an agreement with your Depository Participant
You will receive a unique Beneficial Owner Identification Number (BO ID) on approval of your application. You can do it through your stockbroker as well.
What If You Need To Change Any Details In The Demat Account?
While opening a Demat account with your preferred DP, investors are mandated to provide certain details. You can change these details subsequently.
How Can You Change The Signature In The Demat Account?
To make any changes in the Demat account, you have to inform your DP. If you have a Demat account with a stockbroker, then you can inform your stock broker, who will assist you in this process. Here is a step-by-step guide to applying for changing your Demat account signature:
- First, you have to inform your stockbroker.
- Download and take a printout of the Account Modification Form on the website.
- Fill in the details. In the “Signature” section of the Form, you have to enter your Existing and New Signature details.
- Courier the documents to your Stockbroker’s address along with proof of identity and a bank-attested specimen signature card with the new signature.
Note: The process might vary depending on your stockbroker. You can check with your Broker before sending your documents to the address.
Conclusion
Opening a Demat account online is easy today. If you have all the documents ready, it takes less than 5 minutes to open a Demat and trading account online. However, you can start trading within 3-7 working days after verification of all the documents that you have submitted.
Moreover, you can make changes to your account without any hassle. You just have to inform your broker, download the modification form from the website, and courier all your documents to the brokerage firm address.
Also, it is completely safe to open a Demat account as your accounts are highly protected and there is no chance of losing your shares, unlike physical shares.