There are two ways t open demat account. There is a traditional method or offline method & Online process which is a quick process. Check understand both the process here in detail –
Open Demat Account Online – A Detailed Process
To Open Demat Account online you need to –
- First, select a brokerage house. There are hundreds of brokerage houses in the country. You have to choose one of them as per your requirements. We will also discuss the things you need to check before choosing your brokerage house.
- Once you select the brokerage house, you can go to their site and click on the account opening section. You will see a form opening on your screen.
- You need to fill the form with the correct details.
- Once the form is filled, you need to submit the form. Check twice all the details before clicking on the submit button.
- Now, you need to upload the documents for verification purposes. There are certain documents like PAN, AADHAAR, and others which you need to upload in the scanned format on this page.
- Once your documents are uploaded, You need to Esign documents via Aadhaar.
- Now you have to select the brokerage plan and pay the amount according to that.
- Once your payment is received by the firm, and your documents are verified, your account will be opened.
- You will receive the login details in your email id which you have registered with the brokerage house while filling up the form.
Offline Demat Account Opening Process
Though in today’s time, the online account opening is an easy process but for many who do not have the proper knowledge or access to internet Opening a Demat Account offline option is also there.
The broker you choose must be having many branches, franchise offices or sub-broker’s offices in different locations. Your offline account opening process will start from –
- Finding the nearest branch, franchise office or sub-broker’s office of the brokerage house you have selected.
- Once you find that, go there and ask for a Demat account opening. The executives will happily entertain you as you are going to invest via them and also in their company.
- You need to fill the application form they give you. Check all the details rightly mentioned.
- Now they will ask you for your KYC documents. You need to provide the photocopy of PAN, AADHAAR and other documents for KYC verification. The documents will be attached to the form and then you need to submit the same to the executive who is attending you.
- After a few days, you will know whether your application is accepted or rejected based on your documents verification result.
- You will receive a letter and email at the same time with the login ID and password if your application for the account is accepted.
Whether you opt for Online Demat Account Opening or offline, you need to provide some of the crucial documents for verification purpose and that we will discuss in the next section of this article.
Documents Required to Open a Demat Account
If you want to open a Demat account at one go then you have to fill your application with these Demat Account Documents for verification purpose –
- One proof of identity can be your driving license or any other documents as mentioned in the account application form.
- One address proof – You can submit passport, voter id or electricity bill here
- Income proof – Bank account statement of 6 months, photocopy of Income Tax return acknowledgment. It is required for the trading in the F&O segment and other derivatives.
- You also need to provide a Cancelled Cheque as proof of Bank Account.
- PAN Card is mandatory
- AADHAAR Card as well
- Passport-sized photographs of the applicant
Demat Account Charges
While choosing your brokerage house (DP) you need to consider the Demat Account Charges which they charge for providing you with the service.
First and foremost, you need to choose a brokerage house who is an authorized DP. You need to see, with which depository, the DP is associated and whether it is registered with SEBI or not.
The account charges are the accumulation of certain charges which are discussed below.
Demat Account opening charges
The primary charge you need to pay for opening the Demat account is known as the account opening charge. The charge varies from one brokerage house to another and it can be free as well.
There are many brokerage houses that do not charge a penny for opening accounts with them. You need to see what kind of account they have.
You can open a three-in-one account or two-in-one account. The former is having a bank account along with the Demat and trading account and the latter is having no bank account attached.
Generally, the financial institution that is having banking division provides three-in-one accounts.
Demat Account AMC or Account maintenance fees
The brokerage house and the depository maintains your account with them and provides you with the service you require. They charge a yearly charge for the same.
Annual maintenance charge or AMC is this yearly charge referred above. DPs and especially the private brokerage houses mostly waive off for the trading account annual maintenance charges but not for the Demat account.
There are certain private brokerage houses who waive off the account maintenance charges as well. There are various offers which if availed, then AMC is reduced or waived off.
SEBI has started a new service which is known as Basic Services Demat Account – BSDA which has no annual maintenance fee requirement. It has been started from 1st June 2019.
Though there is a condition as well if your account is having debt securities up to Rs. One lakh, then there is no AMC. As it crosses the Rs. 1 lakh bar, you need to pay a maximum of Rs. 100 AMC up till Rs. Two lakh of debt securities in your account.
The Depositories CDSL and NSDL charges a custodian fee which is a one-time fee. The DP or the brokerage house charges the same from the customer and pays it to the Depository. However, you would hardly find any brokerage houses charging this fee.
Brokerage Charges and Transaction Charges
The brokerage charges are charged as per the plan selected and the Transaction charges are also levied on the transactional amount by the DP. It is because they are processing your transaction so they charge a transaction charge.