- Last Updated: May 03,2024 |
- Religare Broking
Gone are the days when you had to handle physical certificates for stock market transactions. Now, you can benefit from a Demat account. Beginners in the stock market must know how to open a Demat account and start investing. Read on to understand how to create a Demat account in this blog.
What is a Demat Account?
Investors used to collect paper certificates for each trade before 1996 in India. The government proposed the Depository Act 1996 and launched Demat accounts to solve this problem.
A Demat account allows investors to hold electronic securities or securities in digitised form, thus removing the use of paper certificates. It can hold shares, bonds, debentures, and other securities in electronic form and will offer safe storage for your securities, thus removing the chances of fraud.
Why Do You Need to Open a Demat Account?
Before understanding how to open a Demat account, let us discuss its importance. Here are some reasons:
Safe Storage: A Demat account can help store electronic securities safely. You don’t have to indulge in paper certificates for each transaction.
Smooth Transactions: It ensures smooth transactions of securities. Upon purchasing new securities, they are automatically transferred to your Dematerialised account. Similarly, securities are withdrawn from the same when you decide to sell them.
Simplified Ownership Transfer: You can transfer your ownership and securities to another individual easily. It also helps with the transfer of securities in case of the demise of the original account holder.
Easy Portfolio Monitoring: It helps you view all your securities at once. You can monitor your holdings anytime with a dematerialisation account in India.
How to Open a Demat Account Online?
The Demat account opening process can take place online as well as offline in India. You can start the application while sitting on the couch at your home. Here’s how to open a Demat account online in India:
Step 1: Choose a stockbroker offering Demat account services and visit its official website.
Step 2: Start your application by providing simple details like your name, mobile number, etc.
Step 3: You will be asked to confirm your mobile number and email address through OTP (One Time Password).
Step 4: You must complete the application by providing your KYC (Know Your Customer) details online.
Step 5: You must now upload KYC documents and the application for verification. You must upload the PAN card, Aadhaar card, cancelled cheque, and other documents the stockbroker requires.
Step 6: Upload your photograph and e-signature. The stockbroker might also call for an in-person verification. Some stockbrokers might complete the verification step over a video call/conference.
Step 7: Wait for some time after your in-person verification. You will receive your Demat account credentials to start investing.
How to Open a Demat Account With Religare Broking?
Here is the procedure to open a Demat account with Religare Broking:
Visit the official website of Religare Broking and click on the ‘Open an Account’ button. You can directly click on this link - https://www.religareonline.com/open-demat-account/.
Provide your full name, email ID, city name, mobile number, and OTP to proceed
Provide KYC details and upload the required documents
You will receive Demat account credentials upon successful KYC verification
List of Accepted KYC Documents
KYC documents are mandatory for online Demat account opening. You must upload these documents along with your account opening application to open a new account. It is compulsory for stockbrokers to collect KYC details before opening a new account. The documents needed are a passport, driver’s license, voter’s ID, bank verification letter with photographs, etc. It is crucial to note that a PAN (Permanent Account Number) card is mandatory to complete the process. Besides the PAN card, you might be asked to provide any other identity proof/document.
Documents required to open demat accounts will include address proofs as well. You might have to provide an Aadhar card, driver’s license, NREGA job card, or any other document to prove your address. In some cases, these documents might not include the updated or current address of the applicant. In such a case, you can offer a utility bill, municipal tax receipt, letter of accommodation, or any other document to prove your current address.
Besides the aforementioned documents, stockbrokers require a cancelled cheque to verify your bank account.
Demat Account Opening Charges
Online Demat account opening charges can vary from one stockbroker to another. Depository participants and stockbrokers in India can charge anywhere between Rs. 300 and 800 to open a new account. However, you can skip these charges if you open your account with Religare Broking. You can now open a Demat-cum-trading account for free with Religare Broking.
Charge Name | Frequency |
Demat Account Opening Charge |
One-time |
Trading Account Opening Charge |
One-time |
AMC (Annual Maintenance Charges) |
Yearly |
Facilities Available with a Demat Account
A dematerialisation account can help you in many ways. Here are the facilities that come with a Demat account in India:
Secure Transfers: You can transfer your securities from one account to another anytime.
Digitised Securities: Dematerialisation of securities includes converting them into electronic format. Your securities are safe from theft or fraud with this account.
Easy Corporate Actions: It can help investors with rights issues, dividend payouts, and other company actions.
Account Freeze Facility: Investors can use the account freeze facility when they suspect a fraud or scam. They can put their securities on hold to prevent unauthorised transactions.
Loans: Securities held can be used as collateral to secure loans.
Benefits of a Demat Account
Now that you understand the concept of dematerialisation, let us discuss the benefits of Demat accounts:
One can make transactions anytime with a Demat account. Transfer of securities became much easier.
You don’t have to worry about forged paper certificates anymore. These accounts can store securities in electronic format, thus saving them from theft and fraud.
It is a one-stop solution for holding equity and debt instruments in a portfolio.
You can check your possessions anytime and stay updated. Portfolio tracking will lead to informed decision-making.
Companies will credit dividend amounts or additional shares (in case of scrip dividends) directly to your account. You can hold an integrated Demat-cum-trading account for better results.
You don’t have to pay stamp duty charges for paper certificates with a Demat account.
It facilitates the transfer of securities to the nominee during the demise of the original owner.
Key Factors to Consider When Opening a Demat Account
Now that you understand how to open a Demat account, here are some factors to consider before applying for one:
Safety: It adds an extra layer of safety for securities. You must choose a reliable stockbroker who can implement the safety measures.
Cost Efficiency: It removes the stamp duty charges associated with paper certificates. You must choose a broker that offers services with minimal account opening and maintenance charges. Also, consider the zero brokerage charges for transactions via the trading account.
Ease of Use: Your services provider will offer a digital platform to access your holdings. You can apply for a 2-in-1 brokerage account, which can be accessed easily via a trading platform.
Account Opening Process: Choose a stockbroker that allows applying for a Dematerialised account online.
Recommended Read: About Minor Demat Account
Conclusion
Opening a Demat account online in India has become a straightforward process, thanks to technological advancements and streamlined procedures by stockbrokers. By following the steps outlined and providing the necessary KYC documents, investors can quickly access the benefits of holding electronic securities.