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Demat Account Must Read
What is a Demat Account?
2) How to open a Demat account?
3) Benefits of Demat account?
4) Documents required for opening a Demat Account?
5) Charges to open a Demat Account?
What is Demat Account ?
Demat account is mandatory for trading and investing of shares. Demat refers to dematerialized
account. Demat Account is a safe secure and convenient way where you can buy and sell the shares
without any paper work and all the things will be taken care by the DP (Depository Participants).If
you have demat account you need not to show any kind of physical certificate that you have these
shares. They held automatically in your account. DP will also provide you monthly statement of your
transaction just like a bank statement
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How to Open a Demat account?
To open a Demat account you have to approach DP and he will be guided you the official procedure
to open an account.
To see who the register DP is, you can visit NSDL and CDSL website .You can choose the DP of your
own choice. On opening a demat account, a unique BOID (Beneficial Owner Identification) Number
is allotted, which should be quoted in all future transactions.
You can open a Demat account with no balance of shares, there is no minimum balance is required
Documents required for opening a Demat Account? ?
1) To open a demat account you have to fill demat request form
2) One Passport size photograph, proof of address like Voter ID card, electricity bill or Ration Card,
Employee ID Card, Bank attestation and Latest IT Return
3) Submit the DRF & share certificate(s) to DP. DP would forward them to the issuer / their R&T
Agent.
4) Deface the share certificate(s) you want to dematerialize by writing across Surrendered for
dematerialization
5) After dematerialization, your depository account with your DP would be credited with the
dematerialized securities.
6) You have to Submit the PAN Card as a proof of identity .As of April 2006 it ismandatory, if any
person want to open a demat account should have a PAN CARD (Permanent Account number) .
Without a PAN CARD you are not be eligible to open a Demat account
Benefits of Demat Account
Nomination facility is available in Demat account
You can purchase ,hold and sell shares in electronic form
You can save a transaction cost with quick transfer
Shares are credit automatically in Demat account ,no paper work is required
It is quick, easy, safe and secure, it reduces time taken during trading and avoiding the problem like
signature mismatch and loss of certificates and the risk due to fire and theft
Demat account holders need not pay stamp duty posted.
You can even sold one share as per your choice
You can open as many account ,there is no limit on that, and you can open your account before you
buy your first security
You can open a multiple demat account, which can be operated by multiple holders
Demat Account Opening fees
Few banks will not charge you the demat account opening fees, but there is some annual maintenance
charges as well as transaction charges on Demat account
Custodian fee
Custodian fees depends on the number of securities and this fees is charged monthly (international
securities identification numbers ISIN) held in the account. It generally ranges between Rs 0.5 to Rs
1 per ISIN per month.
DPs will not charge custody fee for ISIN on which the companies have paid one-time custody charges
to the depository.
Transaction fee
On a monthly basis transaction fees is charges for crediting/debiting securities from the account. The
fee also based on the kind of transaction (buying or selling). Some DPs charge only for debiting the
securities while others charge for both. The DPs also charge if your instruction to buy/sell fails or is
rejected.
In addition, service tax is also charged by the DPs.
