Demat account   👍

If you are thinking about investing in the stock market .The first step is to open demat account.Without demat account you can not buy or sell shares.But don’t worry to open demat account is very easy, and in this article I will tell you everything step by step how  to open demat account .Whether you are a beginners or looking  to search better demat account this article will help you lot .

What is demat account ?

Demat account means Dematerialized account in which you can store your share ,etf ,mutual fund or bond in electronic form,Demat account is just like a bank saving account as in bank account it hold our money same in demat account we can hold our share,etf ,bond and mutual fund.Before digitalization era It was very difficult to hold your share because earlier it was in paper documentation form and it could get lost or damaged.With a demat account all of the hassle is gone .

Why we need demat account ?

If you want to invest in stock market it is mandatory to have a demat account because it provides –

• Safety and Security –

Because  demat account is now fully digital so you need not fear of losing or damaging paper certificate .

• Convenience –

Because of digitalization you can buy or sell your share within a minute by using your phone or laptop.

• Faster transaction –

         If you buy any share it instantly credited  in your account also if you sell it will sell off immediately without any hassle .

• Multiple investment option –

With the help of demat account you can store not only share but also you can hold Mutual fund, Etf, bond ,and government security .

• Auto credit benefits –

Suppose you buy any stock if it gives any type of dividend and bonus it will automatically credited in your demat account.

Types of demat account –

There are three types demat account–

1 . Regular demat account –

                       This demat account is for only indian resident who want to invest in stock market.

2. Repatriable demat account –

                                               This demat account is for NRI (Non Residential Indian ) who want to invest in india and send the fund to abroad.

3 .  Non Repartiable demat account –

                                                 This demat account is also for NRI who want ot invest in india but they could not send fund abroad.

How to open demat account –

Now you are aware of demat account and their types so the next step is to how to open the demat account ,I will tell you everything step by step 

Step 1: Choose a Depository Participant (DP)

A Depository Participant (DP) is a financial institution (bank, broker, or online investment platform) that offers Demat services. Some popular DPs in India include:

• Zerodha
• Upstox
• Groww
• Angel One
• ICICI Direct
• HDFC Securities
• Kotak Securities

Step 2: Visit the DP’s Website or Office

• If applying online, visit the DP’s website and look for “Open Demat Account” or “Sign Up”.
• If applying offline, visit the DP’s office and request an account opening form.

Step 3: Fill Out the Demat Account Application Form

You will need to provide details such as:

• Full Name
• Mobile Number
• Email ID
• PAN Card Number
• Date of Birth
• Bank Account Details (Account Number & IFSC Code)
• Occupation and Income Details

Step 4: Upload Required Documents

You must submit the following KYC (Know Your Customer) documents:

1. Identity Proof (Any One)

• PAN Card (Mandatory)
• Aadhaar Card
• Voter ID
• Passport
• Driving License

2. Address Proof (Any One)

• Aadhaar Card
• Passport
• Voter ID
• Utility Bills (Electricity, Water, or Gas Bill – not older than 3 months)
• Bank Passbook or Bank Statement

3. Income Proof (For Trading in Derivatives)

• Bank statement (last 6 months)
• Income Tax Return (ITR)
• Salary Slip or Form-16

4. Bank Proof

• Canceled Cheque (with your name printed)
• Bank Passbook or Bank Statement

Step 5: Complete e-KYC and In-Person Verification (IPV)

• Most brokers complete KYC online through Aadhaar-based e-KYC.
• You may be required to record a short video verification or upload a selfie holding your PAN card.
• Some brokers schedule a video call for verification.

Step 6: Sign Documents Digitally (e-Sign with Aadhaar OTP)

• If applying online, sign digitally using Aadhaar-based OTP.
• If applying offline, sign the printed forms and submit them along with physical copies of documents.

Step 7: Receive Demat Account Details

Once your application is verified, you will receive:

• Demat Account Number (DP ID)
• Client ID
• Login Credentials for the trading platform

 What is Demat Account Number (DP ID)-

A Demat Account Number is a unique 16-digit number assigned to you when you open a Demat account with a Depository Participant (DP). This number helps in identifying your account and managing your securities.

Demat Account Number Structure:

A Demat account number consists of two parts:

• DP ID (Depository Participant ID) – First 8 Digits

• This represents the broker or financial institution where you opened your account.

• Example: If you open an account with Zerodha, their DP ID might be 12081600.

• Client ID – Last 8 Digits

• This is your unique account number assigned by the broker.

 Difference Between DP ID and Demat Account Number

Types of Depositories in India

There are two main depositories in India:

1. NSDL (National Securities Depository Limited)
   • Format: INXXXXYYYYYYYY (e.g., IN24524567894526)
2. CDSL (Central Depository Services Limited)
   • Format: 16-digit numeric number (e.g., 1208160012345678)

🔹 Note: If your broker is registered with CDSL, your Demat account number is a 16-digit numeric code. If it’s with NSDL, it starts with “IN” followed by 14 digits.

Where to Find Your Demat Account Number?

You can find your Demat Account Number in:
✔️ Welcome email from your broker
✔️ Broker’s mobile app (Under profile/account details)

What is a Trading Account?

A Trading Account is used to buy and sell stocks, bonds, mutual funds, and other securities in the stock market. It acts as a link between your bank account and Demat account to facilitate transactions.

How Does a Trading Account Work?

1️⃣ You place a buy order →When you place a buy order your  money is deducted from your bank account.
2️⃣ Shares are bought on the stock exchange (NSE/BSE).
3️⃣ Shares are stored in your Demat account in electronic form.

Similarly, when you sell shares, they are debited from your Demat account, and the money is credited to your bank account.

What is a Broker?

A broker is a registered financial intermediary that buys and sells stocks, bonds, and other securities on behalf of investors. Brokers provide a platform (website or mobile app) to help individuals and institutions trade in the stock market.

Types of Brokers

1️⃣ Full-Service Broker 🏦

• full service broker generally are bank and they provides research reports, advisory services, and personalized support.
• They charges higher brokerage fees.
• Examples: ICICI Direct, HDFC Securities, Kotak Securities, Sharekhan.

2️⃣ Discount Broker 💻

• discount broker provides low-cost brokareg  but they dont provides advisory services 
• They charges zero or minimal brokerage fees.
• Examples: Zerodha, Upstox, Groww, Angel One.

Functions of a Broker

✔️ Facilitates Buying & Selling –They  connects investors to stock exchanges (NSE, BSE).
✔️ Demat & Trading Account Services –They  helps open and maintain a Demat account.
✔️ Margin Trading – They provides leverage for intraday trading.
✔️ Market Research & Analysis – (Only full-service brokers) Provide stock recommendations.
✔️ Customer Support – They helps investors with account-related queries

Conclusion-

Opening a Demat account is the first step toward investing in the stock market, and the process has become easier than ever with online applications. By choosing the right Depository Participant (DP), completing KYC, and linking your bank account, you can start trading in just a few days. Whether you’re a beginner or an experienced investor, having a Demat account allows you to hold stocks, mutual funds, and other securities securely in digital form.

With a variety of brokers available, it’s important to compare brokerage charges, platform features, and customer service before making a decision. If you’re new to investing, opting for a user-friendly discount broker can be a great way to start with low costs.

FAQs

Q1: How long does it take to open a Demat account?

👉 It usually takes 24-48 hours if done online. Offline applications may take 5-7 working days.

Q2: Can I open a Demat account without a PAN card?

👉 No, a PAN card is mandatory for opening a Demat account.

Q3: Is it necessary to have a bank account?

👉 Yes, a linked bank account is required for fund transfers.

Q4: Are there any charges for opening a Demat account?

👉 Many brokers offer free account opening, but there may be Annual Maintenance Charges (AMC).

Q5: Can I open multiple Demat accounts?

👉 Yes, you can open multiple Demat accounts with different brokers, but not with the same broker.