How many Steps are Needed to Open a Demat Account?

One can invest or trade in many kinds of assets in share markets which unveil a world of numerous opportunities. To unlock this exciting world of the stock market, you first need a demat account. A demat account is a repository of shares and securities. It holds all your investments in electronic format. So, a Demat account provides digital storage making it convenient to track and manage assets. We can access the data on our smartphones too. Demat account opening is thus quite crucial. If you want to open a demat account, read through this post to know it all.

Investors can open a demat account in two ways. Apart from the traditional way of approaching a depository participant, today, one can open a demat account  online too. An online trading app also provides facilities to open a demat account . The online apps are easily available on popular app stores like Google Playstore and Apple App store. One can download one such share trading app. You can open a demat account in just five simple steps. Let’s now discuss them in detail and touch upon both the online and offline methods. Follow the steps mentioned below.

The procedure to open a demat account

Step#1: Identify a suitable Depository Participant (DP)

A Depository Participant or DP is a financial institution that facilitates the opening of demat accounts and provides financial services. Many such organisations are there providing financial services. However, choosing a good firm for a demat account opening would be best. The platform it provides must be efficient enough to handle all our transactions. Most importantly, the brokerage charges levied for services should be minimal. Therefore, always go with reputed firms like Kotak Securities. Kotak Securities is a leading player in the financial services market. A single demat account and a trading plan are sufficient to trade in all kinds of assets. The brokerage charges are very considerable too. Subscribing to a trading plan further cuts down costs. 

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Step#2: Fill up the account opening form

It’s time to get the demat account opening form. You can get it from the branch office of a stockbroker. Alternatively, if you opt for online demat account opening, you can find it on the website or app of your broker. Kotak Securities, for instance, provides demat account opening facilities both on its website and app. You can download the account opening form from these online portals. Now, fill in all the relevant details carefully. You will have to mention your name, date of birth, address, email id, phone number, etc. Submit the duly filled form to your broker.

Step#3: Complete the KYC and documentation 

You will have to fill out the Know Your Customer (KYC) form. Herein, you will have to again provide basic personal details like name, address, contact number, etc. After that, the broker will ask for the requisite documents. These include proof of identity and address. In addition, your bank and pan details are also necessary. Here’s a list of documents you can use.

For proof of Identity–

  • Aadhaar card
  • Passport
  • Driving license
  • Voter id
  • Pan card

For address proof–

  • Aadhaar card
  • Driving license
  • Voter id
  • Land lease agreement  
  • Documents provided by the municipal corporation or gram panchayats mentioning the residence address
  • Utility bills like electricity, water, gas, or telephone bill

Bank account proof–

  • Copy of your passbook
  • Account statements for the last three months
  • A cancelled cheque 

In addition, you will have to provide your PAN number along with two recent passport sized colour-photographs. Some DPs may also ask for your income tax returns (ITR) as income proof for trading in certain segments.

Step#4: Go through your verification process

Now, you will have to visit the branch office of the firm for an in-person verification. This is a mandatory step for most brokers. Some firms, like Kotak Securities, do provide online verification. Choose Aadhaar-based e-KYC or video verification. Opening the account online on a share trading app is hence quite beneficial. The broker will check whether all the information shared by you is correct. Upon successful verification, you will have to sign the agreement and the power of attorney (POA) for debit and credit to your demat account.

Step#5: Get the BO ID 

BO ID is the Beneficiary Owner identification number, unique to every demat account. Your broker will send this on the registered email id and phone number along with the login credentials. If you open a demat account on a share trading app, you can also use a one-time password (OTP) or fingerprint authentication for login. Your demat account is now open.

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