How to Open a Demat Account: A Step-by-Step Guide
Opening a Demat account is a crucial step for anyone looking to invest in shares, mutual funds, or other securities in the stock market. A Demat account, short for “Dematerialized account,” holds your securities in electronic form, ensuring convenience and security. Here’s a detailed guide to help you through the process.
1. Understand the Basics
A Demat account eliminates the need for physical share certificates, making transactions seamless. To open a Demat account, you will need a Depository Participant (DP) registered with either of the two depositories in India: NSDL (National Securities Depository Limited) or CDSL (Central Depository Services Limited).
2. Choose a Depository Participant (DP)
Research and select a reliable DP, such as a bank, financial institution, or broker, offering Demat account services. Compare their fees, services, and user reviews to find the best fit for your needs.
3. Gather Required Documents
Keep the following documents handy to streamline the account opening process:
- Proof of Identity: PAN card (mandatory), Aadhaar card, voter ID, or passport.
- Proof of Address: Utility bill, bank statement, or Aadhaar card.
- Bank Details: Cancelled cheque or bank statement.
- Passport-sized Photographs.
4. Fill Out the Application Form
Visit the DP’s website or branch and fill out the Demat account opening form. Many DPs offer an online process for added convenience.
5. Complete KYC Formalities
Submit your documents for Know Your Customer (KYC) verification. Online account opening usually involves e-KYC using Aadhaar-based authentication.
6. Sign the Agreement
You will be required to sign an agreement outlining the terms of service, rights, and duties of both the account holder and the DP. Read the document carefully before signing.
7. Verification Process
The DP will verify your documents and details. In online processes, this may involve a video call for identity verification.
8. Receive Your Demat Account Details
Once the verification is successful, your Demat account will be opened. You will receive a unique Beneficiary Owner ID (BO ID) and login credentials.
9. Link Your Trading Account
To buy or sell securities, you’ll need to link your Demat account with a trading account. Most DPs offer both services together for convenience.
10. Start Investing
Once your account is active, you can begin trading and investing in the stock market. Always monitor your investments and maintain your account regularly.
Important Points to Remember
- Keep your login credentials secure.
- Understand the charges involved, such as account opening fees, annual maintenance charges (AMC), and transaction charges.
- Ensure that your contact details are updated to receive transaction alerts.
Opening a Demat account is the gateway to participating in the stock market. With the right DP and an understanding of the process, you’ll be ready to embark on your investment journey.
Table: All Stock Broker charges and AMC
Brokerage Charges of all stock broker
| Broker Name | Account Opening Charges | Annual Maintenance Charges (AMC) | Delivery Brokerage | Intraday, F&O Brokerage |
|---|---|---|---|---|
| Zerodha | ₹200 | ₹300/year | Zero | ₹20 or 0.03% per trade (whichever is lower) |
| Upstox | ₹299 | ₹25/month | Zero | ₹20 or 0.05% per trade (whichever is lower) |
| Angel One | Free | 1st year free; ₹20/month thereafter | Zero | ₹20 or 0.25% per trade (whichever is lower) |
| Motilal Oswal | Free | Free/₹400 | 0.50% on transaction value | 0.05% on transaction value |
| 5paisa | Free | ₹45/month while you trade | ₹20 per trade | ₹20 per trade |
| Sharekhan | ₹750 | 1st year free; ₹400/year thereafter | 0.50% | 0.10% |
| Groww | Free | Zero | ₹20 or 0.05% per trade (whichever is lower) | ₹20 or 0.05% per trade (whichever is lower) |
| Paytm Money | ₹200 | Zero | Zero | Minimum of 0.05% or ₹10 (intraday); minimum of 0.02% of turnover or ₹10 per executed order for F&O |
| ICICI Direct | ₹975/Free | ₹500/year | Multiple plans | Multiple plans |
| HDFC Securities | ₹999/Free | 1st year free; ₹750/year thereafter | 0.50% or minimum ₹25 or ceiling of 2.5% on transaction value | 0.10% or minimum ₹25 or ceiling of 2.5% on transaction value |
| SBI Securities | ₹850 | ₹500/year | 0.50% or 5 paise per share (whichever is higher) | 0.15% or 5 paise per share (whichever is higher) |
| Kotak Securities | ₹499/Free | ₹600/year | 0.25% | Zero on Intraday; ₹20 on F&O |
| Fyers | Free | Zero | Zero | ₹20 per trade or 0.03% per trade (whichever is lower) |
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