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How to Open Demat Account? Procedures & Documentation

Last Updated Date - Mar 22, 2023

In this article, we will learn about Demat Account Opening Procedures, the Documentation required for Demat and Trading Account Opening & Guidelines required for Opening a Demat Account.


How to Open a Demat Account?

open demat accountBefore learning how to Open a Demat account, one should learn what a Demat and Trading account is, a Demat account is one where a person can account for their securities. The working is more or less similar to that of bank accounts.

The special part is that one need not maintain an account balance to open the account. One can open it with nil balance itself.


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    Demat Account Opening Procedures

    Now that we have seen what a Demat is, we will move on to see how to open an account. Following are the procedures for opening a Demat-Trading account.

    Choosing a Depository Participant (DP)

    To open an account with banks, online investment platforms, brokers, etc., one has to select a Depository Participant (DP). This DP will act as a mediator between the one who opens the account and the depository.

    Submission of KYC documents

    The DP will ask for Identity proof. It can be one’s driving license, voter ID, PAN, etc. One needs to submit a self-attested photocopy of it to the broker (DP).

    Here, the account holder is given the option to choose a nominee. This is advisable since this will provide security to the securities one holds, in case something unfortunate happens to the concerned.

    The KYC form also has the DP-Investor agreement which has the terms of the agreement, rules and regulations, and charges that incur while holding a Demat/Trading account. It also includes the powers of the investor and the responsibilities of the DP.

    There will be a personal verification by the DP to ensure that the details provided are true in all forms.

    Obtaining the Beneficiary Owner Identity

    The DP opens the Demat account upon processing the application. The DP will give the account holder a Beneficiary Owner Identity (BOID).

    BOID is a unique account number that one should use during any transaction and access one’s account.

    One needs to open a Trading account to enable buying and selling shares. You can do the same when you open the Demat & Trading account.


    Documents Needed to Open Demat Account

    The following are the important documents that one needs to possess for opening a Demat or Trading account

    • Proof of Address
    • Proof of Identity
    • PAN Card
    • Passport Size Photograph

    Information on Demat plus Trading Account

    • Account Holder name: The name of the account holder should be as the same that has been mentioned in his/her identity proof.
    • Proof for Mailing and Communication: The address of the account holder should be as the same that has been mentioned in his/her identity proof.
    • Details of Guardian in case it’s a minor account
    • Declaration of Nomination
    • Details of Bank Account

    Guidelines to remember while Opening Demat Account

    To open Demat, there are certain points to be remembered and guidelines to be followed about citizenship status and the status one holds depending on one’s citizenship held.

    A minor has a different criterion to fulfill like they should produce their school mark sheet; an NRI can also open a Demat account in India provided they fulfill certain criteria like subjecting to RBI/ FEMA guidelines.

    The PAN Card self-attestation should be done properly. The right documents should be submitted to avoid any confusion.

    Therefore, Demat / Trading account opening is the dawn of a chaos-free investing experience since it invites no risk as to storage of paper documents nor it is time-consuming as compared to the offline trading done traditionally.


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