How to open a demat account: Online and offline methods, charges

Are you ready to dive into the world of stock market investing? Let's talk demat accounts. Learn how to open a demat account, both online and offline

By Forbes India

Published: Sep 11, 2024 06:20:32 PM IST

Updated: Sep 11, 2024 06:22:07 PM IST

If you're considering investing in the stock market, there's something you should know about – demat accounts. These accounts, short for dematerialised accounts, act as a digital repository for your securities like stocks, bonds, and mutual funds, all in a paperless format. Before learning to open a demat account, you need more information about what they do for you.

With a demat account, you can trade securities seamlessly through online platforms without the hassle of dealing with physical share certificates or tons of paperwork. Plus, it speeds up transaction processing and reduces the risk of loss or theft. Opening a demat account is a must for anyone serious about investing. In this blog, we have outlined the steps to open a demat account.

Procedure for opening a demat account

We've provided a comprehensive guide on starting a demat account, which can be initiated through either online or offline channels.

Let’s begin with the online method.

How to open a demat account online

You can request to start a demat account with any Depository Participant (DP) through their website. Here's a detailed guide on opening a demat account online:

- First, research and select a secure DP website of your choice, then visit the website's page.

On the chosen DP website, locate and click on the 'Open Demat Account' option, then follow the on-screen instructions.

- Fill out the online form with accurate details such as your phone number, email address, etc.

You'll receive an OTP (one-time password) to verify your details before proceeding.

- To open a demat account, you must provide the necessary documents, such as your PAN card and banking details.

- To finalise the process and receive your demat account number, digitally authenticate your KYC (Know Your Customer) information.

Note: In most cases, the DP may contact you to complete additional formalities and finalise the account opening process.

How to open a demat account offline

Here's the process for opening a demat account offline:

- Begin by selecting a Depository Participant (DP), which could be a licensed bank, financial institution, or broker. Consider factors such as brokerage fees, annual charges, and services offered when choosing.

- Ensure you have all documents required for the demat account ready, including:

PAN card
Proof of residency (Aadhaar card, passport, driving licence)
Identification proof (passport-sized photos)
Signature on white paper
Income proof

- Read through and sign an agreement outlining the terms, conditions, and rights of holding a demat account. If you have any questions, don't hesitate to ask.

- Once completed, submit the agreement to the DP, and you'll receive a copy with an authorised signature.

- Upon opening the account, the DP will assign you a unique Client ID, granting you online access to your demat account.

- The DP will provide you with instruction sheets detailing various depository services, such as transfers and purchases. These sheets will guide you through the effective use of your demat account.

Demat account providers in India

Here is a list of the top demat account providers in India, with their account opening charges and maintenance charges given:

Demat Account Provider	Account Opening Charges (INR)	Maintenance Charges (INR)
Paytm Money	100	Free
Zerodha	200	300/year
Aditya Birla	750	300/year
Upstox	0	150/year
5Paisa	0	300/year
Groww	0	Free
Axis Direct	0	650/year, free for first year
Kotak Securities	0	600/year
SBI Securities	850	0
HDFC Securities	0	750/year

Frequently Asked Questions (FAQs)

1. How much money is required to open a demat account?

The amount required to open a demat account in India can vary depending on the Depository Participant (DP) and their specific requirements. Some DPs may offer zero balance or low balance accounts, while others may require an initial deposit ranging from a few hundred to a few thousand rupees. It's advisable to check with different DPs to find one that best suits your financial situation and investment needs.

2. Can I hold two demat accounts?

Yes, you can hold multiple demat accounts in India. There is no restriction on the number of demat accounts an individual can hold. However, it's important to note that having multiple accounts may require you to manage and monitor your investments across different platforms, and you may incur additional fees for maintaining each account. Additionally, you must ensure compliance with regulatory requirements and tax implications associated with holding multiple demat accounts.

3. Which demat is best for trading?

Choosing the best demat account for trading in India depends on factors like brokerage charges, trading platforms, customer service, research resources, and provider reliability.

4. Can I keep my demat account empty?

Yes, you can keep your demat account empty, but it may attract penalties or fees from the Depository Participant (DP) if it remains inactive for an extended period.