When you think of investing in the stock market, the first thing you require to get started is opening a Demat account. Today, you can open a Demat account online with easy assistance from your stockbroker. With just a few simple steps and the correct documents, you can easily have your Demat account.
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Why Do You Need A Demat Account?
In the stock market, you have to invest in shares. You can buy shares of listed companies through your stockbroker. You can do it through the mobile application, website or directly call your broker to place a trade for you.
When you buy a share, you get an electronic certificate in your email address or mobile number. This share certificate also gets saved in the Demat account. Thus a Demat account, also known as Dematerialized account, holds your shares and securities in electronic format.
If you want to sell your shares, you have to log in to your Demat account and sell the shares. But, you must have a Trading account to sell your shares. Only when your Trading account is linked with your Demat account, you can sell the shares.
In addition to shares, a Demat account holds your securities, such as mutual funds, exchange-traded funds (ETFs), and bonds. You should always open a Demat and Trading account jointly so that you can easily buy/sell your shares and certificates.
Which Documents Are Required To Open A Demat Account?
To open a Demat account, an investor requires the following documents:
- A valid proof of identity card (Aadhar Card/Voter Card/Driving License/Passport)
- A valid residential proof (Passport/Driving License/Any Utility Bill not older than 3 months/Ration Card/Voter Card/Copy of your bank statement not older than 3 months)
- PAN Card
- Income Proof for trading in Derivatives ( Recent salary slip/Form 16/Copy of your ITR)
Other documents that you would require are:
- Cancelled Cheque of any commercial bank in India
- Valid Photograph
- Signature on a White Paper
All these documents are to be provided when you open a Demat account in India. The documents required will slightly differ based on the type of brokerage account you are opening. An investor must be above the age group of 18 years or above.
For Minors and Non-Resident Indians (NRI’s), Investors can contact their broker to get the details of documents required for opening a Demat and trading account.
How Much Time Does It Take To Open A Demat Account?
Provided you have all the documents handy, it takes less than 5 minutes to open a Demat account online. However, it generally takes 3-7 working days to trade using your Demat account after verification of all the documents that you have submitted.
Conclusion
Unlike your bank account, a Demat account holds your shares and securities. A Demat account is highly safe and secure. New Investors need a Demat account to start investing in the financial market.
While the primary goal is to enable investors to hold and transfer the shares safely, it also provides an efficient and optimised experience of trading.
Open an online Demat and Trading account now
