A demat (short for “dematerialized”) account is an electronic account used to hold and trade securities such as stocks, bonds, mutual funds, and exchange-traded funds (ETFs) in India. The Securities and Exchange Board of India (SEBI) requires investors to have a demat account to trade securities on exchanges like the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
To open a demat account in India, you need to follow these steps:
- Choose a broker that offers demat account services. Some popular DP’s in India include ICICI Direct, Zerodha, HDFC Securities, and Sharekhan.
- Complete the account opening form, providing personal and bank details, and submit it along with the required documents such as PAN card, Aadhaar card, passport size photograph, and proof of address.
- Once your application is verified, you will receive your demat account number, login credentials, and other relevant details.
Best demat accounts in India:
- Zerodha – Zerodha is one of the leading discount brokers in India, and their Demat account is popular among investors. They offer a zero maintenance charge for the first year and a low charge of Rs. 300 per year after that. They also offer a user-friendly platform for trading and investing.
- Upstox – Upstox is another popular discount broker in India, and their Demat account is known for its low brokerage charges. They offer a maintenance charge of Rs. 150 per year, and their trading platform is easy to use.
- ICICI Direct – Offers a 3-in-1 account that includes a savings account, trading account, and demat account, making it easy to manage all investments from a single platform.
- HDFC Securities – Offers a range of investment options, including IPOs, mutual funds, and bonds, along with easy-to-use trading platforms.
- Angel Broking – Offers advanced trading platforms and research tools, along with a wide range of investment options.
- Sharekhan – Offers a user-friendly trading platform, personalized investment advice, and a wide range of investment options.
It’s important to do your research and choose a broker that fits your investment needs and goals. You should also consider factors such as brokerage fees, customer service, and user experience when choosing a demat account.
Documents required to open a Demat account
To open a Demat account, you need the following documents:
- PAN Card
- Aadhaar Card
- Address proof (electricity bill, telephone bill, passport, etc.)
- Bank statement or cancelled cheque
- Passport size
Fees and charges associated with a Demat account
Apart from the maintenance charges mentioned above, there are other fees and charges associated with a Demat account. They include:
- Account opening charges
- Transaction charges
- Annual maintenance charges
- Pledge creation and closure charges
- Charges for delivery and receipt of securities
- Charges for dematerialization and rematerialization of securities
It’s essential to check the fees and charges of a Demat account before opening one.
