How To Open a Demat Account Online?

Last Updated on 09/07/2021 by Deepak Singla

If you want to learn how to invest in the stock market, the first step is to open a Demat account. For investing in the stock market, a Demat Account is essential. The shares that are purchased and exchanged are in electronic form. A dematerialized account is like a bank account, where instead of cash, shares are kept.

Both listed shares must be settled in Demat mode, according to SEBI (Securities and Exchange Commission), the stock market’s regulator. Buying and selling stocks is easier for a dematerialized portfolio, which eliminates time-consuming paperwork and ineffective delays. To open a Demat account online, you must approach the DPs (Depository Participants).

Learn the benefits of a Demat Account

Lower costs

Stamp duty was a massive cost for buyers when physical share certificates were used. Using Demat accounts now saves investors a lot of money.

Comfortable to hold

Physical share certificates are at risk of being damaged. With a Demat share, though, you won’t have to worry about wear and tear. Both of your shares are kept in a safe and stable environment.

Immediate updates

Any investment you make adds to your portfolio. So, just by looking at your online account, you can get a good idea of your all holdings. You still don’t have to fill out any of the paperwork for an account because the information is already saved.

Easy to track

It used to be difficult to trace physical shares and thereby decide the next of kins in case of any death or other tragedy. With the introduction of Demat shares, it has become easier to not only track shares but also to determine how the transition formalities will be completed.

Risks of supply are reduced

There was still the possibility of lack of credentials, fraud, false certificates, and other issues, in the case of physical shares. Many of these threats, however, are reduced as a result of the reduction in paperwork. All of your shares are automatically updated to your account after you complete a trade.

IPO application

If you want to apply for a company’s initial public offering (IPO), you can only do so with a Demat account. When the IPO allocation is completed, the resulting shares will be directly credited to your Demat account. Furthermore, only a Demat account would be able to pass shares on the platform.

Maintaining records simplified

The NSDL / CDSL will send you a monthly statement of your holdings once you have a Demat account. This will allow you to monitor all of your assets in one place, including stocks, mutual funds, NCDs, ETFs, and insurance.

The process to Open a Demat Account Online

Since the world is evolving every second in terms of economics and technology, opening a Demat account does not require much thought or difficulty. In reality, opening a Demat account is relatively simple; you can do so at any scheduled bank or govt bank. Demat accounts can be opened with the help of stock brokers or some other financial institution.

Steps to open a Demat Account Online:

Get in touch with a registered depository.
Download the form.
Select the right broker
Enter your valid E-mail ID
Provide your PAN number and DOB for KRA verification
Enter your name, address, and mobile number. If you are already KRA verified, systems will automatically fetch your data.
Enter your bank details (this account will be linked to your trading account)
Provide additional information (occupation, education, etc.)
Confirm your brokerage plan
Upload your documents via WhatsApp or E-mail
A representative will get in touch with you to complete the in-person verification (IPV) as per regulation.

After the completion of your IPV and verification of your documents, your account will be ready for trading.

Documents required for Opening a Demat Account Online

Following is a short list of documentation needed to open a Demat account with a financial institution, such as a broker or a bank:

Identity Proof

You can submit your PAN Card (Mandatory Id proof) / Aadhar Card/ Driving License / Passport / Voter Id.

Address Proof

This could be your Aadhar Card / Driving License / Passport / Voter Id / Bank Statement / Bank Passbook / Utility Bill / Electricity Bill / Landline Bill / Gas Bill

Proof of Bank Account

Personalized signed cancel cheque leaf / Bank Statement / Bank Passbook will do.

Proof of Income

If you wish to trade in derivatives, you will need to submit: Bank Statement / Salary Slip / Form 16 – Last Year / IT Return – Last Year

Photographs

One passport size photograph.

Thus, opening a Demat account online is much easier than before. If you enlist the help of your stock broker, the task of opening a De-Materialized account will be made even easier. The smarter way to invest in stocks or some other business is to open a De-Materialized portfolio.