How To Open A Demat Account To Start Trading In Stock Markets: Benefits Of Demat Account

Opening a demat account is one of the initial steps, an investor must follow to start trading in the stock markets. As investors are having better risk appetite for their investment portfolios, in the past 3 years, the numbers of demat accounts have more than doubled and reached above 7.38 crore. A demat account is a mandatory medium for trading, via demat accounts, one can hold stocks, securities like Initial Public Offerings (IPOs), bonds, government securities, mutual fund units along with exchange-traded funds (ETFs). A demat account will ease the process of maintaining the portfolio.

How can you open a Demat Account?

For opening a demat account, at first, you need to select a Depository Participant (DP). A DP can be a bank, financial institution, or broker. Usually, an investor select the DP based on the brokerage charges, annual charges and the leverage offered. You can visit a DP's website online, and the demat account form will be available there. On the website, you will have to put your Email ID, mobile number, One-time password (OTP) given to your registered mobile number and your city, for authentication purposes.

After selecting the DP you must look at the KYC process. You will be required to submit a filled demat account opening form and KYC form. With the form, you will have to attach your Pan card, residence proof (it can be Aadhaar card), ID Proof, and passport-size photograph. At the time of verification, you should carry the original copies of the documents submitted. Along with the documents, the DP will also need a canceled cheque of your own for the dividend bank details.

You will have to sign an agreement, mentioning the regulations and rights regarding holding a demat account. After you submit the documents and forms to the DP, those will be signed by an authorized person. A copy of the paper will be given to the account holder.

If all of your documents and forms are accepted, the demat account will be opened, and you will be receiving a unique client ID from the particular DP. It will help you to access your demat account online. The DP will also offer you instruction slips. It will help you to get to the services such as transfer, purchase, and so on.