How to open a Demat Account ?

Brokerage charge is a charge that is applicable to every order. The brokerage charges also vary from one broker to another. In fact, while opening a demat account this is the most important consideration by the investor. Furthermore, the components of brokerage cost are GST, stamp duty, security transaction tax, service charge and different type of cess.

as you will receive direct credit of refunds, dividends, interest & redemption payment and corporate correspondences like annual reports notice of AGMs etc. as per the details mentioned in your demat account.

An individual can open any number of demat accounts. There is no threshold limit for opening a account. In fact, the investor should use the same PAN number with different brokers. However, there is a limitation on part of depository participant. To put it another way, a depositary participant cannot open multiple accounts of an individual beyond a certain limit. Hence, an individual must check with the depository participant before opening the account.

Nomination smoothens the process of transmission of your securities to your heirs, upon demise.

An individual can open a joint demat account. In fact, the joint account can be with his/her spouse. However, there can be maximum three holders in a single demat account. In addition, out of the three persons, one person shall be the main holder of the account and other two persons shall act as joint holders.

For physical shares, you have to avail nomination separately for each company in which you hold shares / debentures.

Whereas, by availing nomination for your demat account, all your investments in that account is covered under that nomination.

Joint demat account brings us to an important question of whether a minor can be a joint holder or whether account can be opened in the name joint holders. In this segment, we shall discuss and resolve such queries.

How to demat your shares?

To demat your physical certificates, you should approach the DP and submit the following documents:

Dematerialization Request Form (DRF)
Physical certificates by marking “Surrendered for Dematerialization”
Separate DRF has to be filled for each ISIN.

A minor can become a joint holder in the demat account. However, the demat account can also be opened in the name of the minor. In that case, the guardians i.e. father or mother shall maintain such account. In addition, if the minor is not having his/her father, the mother shall act as the guardian. Furthermore, if the minor does not have parents, the court shall appoint a guardian. Therefore, the guardian shall operate the minor’s account until he becomes a major.

Process of dematerialisation:

Surrender your physical certificates to your DP for dematerialisation.
The DP intimates your request to the depository through the system.

The DP submits the certificates to the registrar and share transfer agent (RSTA) of the company.

In case of any objection or in case of additional documents (if any), the RSTA informs you directly. RSTA confirms the dematerialisation request from depository.

In case of any objection or in case of additional documents (if any), the RSTA informs you directly. RSTA confirms the dematerialisation request from depository.

In case of any objection or in case of additional documents (if any), the RSTA informs you directly. RSTA confirms the dematerialisation request from depository.

In case of any objection or in case of additional documents (if any), the RSTA informs you directly. RSTA confirms the dematerialisation request from depository.

After dematerialising the certificates, RSTA updates the accounts and informs depository regarding completion of dematerialisation.

Depository updates its accounts and informs the DP.

Before approaching your DP for demating your shares, you can check the list of shares and debentures that can be dematerialised from the websites of CDSL and NSDL.

There are 3 parties involved in the demat account.

Central Depositories
Depository Participants
Demat account holder (you and me)

Central Depositories: Central Depository Services India Limited (CDSL) and National Securities Depository Limited (NSDL) are the two bodies which are known as the Depositories.

Depository participants: Depository participants are intermediary who are authorized to offer Demat services. They can be Your Bank, Stock Broker or other financial institutions like Zerodha, Samco, Fyers etc.

Each demat account number has a Unique Identification Number (UIN). Whenever you buy or sell any securities the transaction took place into your demat account

transactions are done without even providing your UIN number every time. The backend process will take care of it by itself.

CDSL or NSDL sends you a consolidated Account statement every month, you can check all your holdings through this one single Demat Account