Dematerialized accounts, or demat accounts as they are better known, help investors store and keep track of certificates of shares, bonds, and mutual funds and other securities held in electronic format. A Demat account facilitates document-free trade and transfer transactions.
Demat Account Opening Procedures
- Select a Depository Participant (DP)
- Submit your KYC Documents
- Appear for In-Person Verification
- Get Beneficiary Owner Identity (BOID)
The procedure to open a demat account is almost similar for all the depository participants, and all the brokers follow it. Here are the steps to open demat account:
1. Select a Depository Participant (DP): Select a Depository Participant (DP) you would like to open your account with; this entity will serve as the intermediary between you and the depository. DPs can be banks, brokers or online investment platforms.
our linked companies are registered with the Central Depository Services Limited (CDSL), as well as being a member of BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).
2. Submit your KYC Documents: Submit the form given to you for opening an account, the KYC form, passport size photographs, your PAN card (Permanent Account Number), and other photocopied documents.
At this point, you will be given the option to name a person as your nominee. They will be assigned with the responsibility of your shares if something were to happen to you. The choice of one’s nominee can be changed, if need be in the future, by refilling the same form.
The KYC form also has the Depository Participant-Investor agreement which comprises the terms of agreement, rules and regulations, and charges you will incur whilst holding a Demat account. This form also includes the rights of the investor and duties of the DP.
3. Appear for In-Person Verification: An In-Person Verification may be carried out by a person from your DP’s firm to ensure that the details provided by you in the form are authentic.
4. Get Beneficiary Owner Identity (BOID): Once your application has been processed and your DP has facilitated the opening of your account, he/she will give you a Beneficiary Owner Identity (BOID) – a unique account number – that you can use during future transactions and to access your account.
You need to open a Trading account along with the Demat account so that you can immediately begin buying and selling shares.
Opening a demat account is the beginning of a hassle-free investing experience that involves neither the storage risks of paper certificates nor the time-consuming nature of offline trading.