What is a Demat Account?

A Demat Account, often known as a dematerialized account, is a one of the prerequisites for trading in securities. It is an account used to hold shares and securities that have been bought or dematerialized, thus facilitating online trading. You can hold several securities, like stocks, ETFs, bonds, and mutual funds in your Demat account.

What is dematerialization?

Dematerialization is the process of moving a stock certificate or holding papers from the physical form to an electronic form. Dematerialization is a more accurate form of maintaining records.

Importance of Demat Account

  • A Demat account prevents the loss of documents and speeds up the entire process of buying and selling stocks.
  • Demat account simplifies the entire investment journey for an investor and helps them track all their diversified investments at one place in one view.
  • It helps investors to participate in an upcoming IPO in an easy and simplified way.

How does a Demat account work?

The objective of a Demat account is to store the shares. This is linked with a trading account that is used to buy and sell shares. The shares that you have bought will be then stored electronically in your Demat account.

When a 'buy' order is placed from a trading account, the exchange looks for a seller who wants to ‘sell’ similar quantity of the same stock. Once the exchange finds a match, it will then notify the respective clearing houses to complete the settlement process and the electronic delivery of the stocks bought in the ‘buyers’ Demat account.

Demat and Trading Accounts

Demat and Trading accounts are different things and investors should not confuse between them. A Demat account is used to store shares electronically, and a trading account is used for buying and selling shares. The objective of both may be different, however, today both Demat and Trading Accounts are offered together to customers to make the process of investing in stock market hassle-free.

Open a Demat & Trading account with Bajaj Financial Securities Limited

Types of Demat account

Let us look at the various types of Demat Accounts:

  1. Regular Demat Account:This is only for Indian citizens, who reside in India.
  2. Repatriable Demat Account:This type of Demat account is for Non-Resident Indians (NRI). Once a customer becomes NRI, they need to close their regular Demat account and open a Non-Resident Ordinary (NRO) demat account along with Non-Resident External bank account, which is a must for Non-Resident Indians.
  3. Non-Repatriable Demat Account:This is a Demat account for NRIs, however, the funds cannot be transferred abroad through this account. Users will also need a NRO bank account for this.

Additional Read: What is share market?

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With Bajaj Financial Secures Limited, open free Demat Account and get one of the lowest brokerage rates with multiple unique offerings.

Account Opening Charges

Opening Charges Free*
Brokerage Charges ₹ 5/order*
Application Process Online within 15 minutes
Demat AMC Free
Trading Products Equity/Derivatives/MTF

Benefits of opening Demat Account with Us

It is Free

You can open free Demat and Trading Account through the Freedom subscription pack.

Apply in IPO

With a Demat Account, you can apply in IPO and profit from listing gains.

Access from anywhere

You can securely access your account on desktop and mobile.

How To Open Demat Account Online

The digital process of opening a Demat & Trading account has made trading much easy for all the traders and investors. It is as simple as ordering food online or shopping from any e-commerce site.
To open a Demat account, one needs to select a stockbroker who is SEBI registered and is a Depository Participant at NSDL &CDSL.

Online Demat Account Opening process

Step 1: Visit the Demat Account Opening Form

Click open an account and start filling your application form to open online demat account. Enter mobile number and email ID and get started.

Step 2: Enter your PAN Number, basic details, address, and Bank details

Update the required basic details like PAN number which is a mandate and bank details to link with your demat & trading account.

Step 3: Upload the soft copies of KYC documents.

Once you fill all the details, you are required to upload your scanned documents for KYC purpose such as income proof, bank details, photograph etc.

Step 4: Complete In Person Verification (IPV)

In-Person Verification is a process where you record yourself for 30seconds with the intention of verifying the authenticity of your documents. While recording, keep your PAN and other documents handy with your as you need to read all the details clear and loud.

Step 5: E-sign the form using Aadhaar linked mobile number.

Do a signature on white background and upload as e-sign in the form where required along with your mobile number linked to your Aadhaar Card.

Step 6: Review & Submit the application

Check the complete application to ensure correct details and submit the application.

Additional Read: What is Futures Trading in Stock Market?

Documents Required for Opening Demat Account

PAN Card: It’s a mandatory document to open a Demat account. Ensure the picture and signature are clearly visible

Photo: A passport size photograph

eSignature: A running signature on a white background paper

Address Proof: Any one of these documents - Voter ID, Driving License, Aadhar Card, Passport, Utility Bill (not more than 3 months old) or last 3 months bank statement

Bank Proof: Anyone these documents - Cancelled cheque, passbook, bank statement of 6 months. Ensure clear visibility of IFSC code and bank a/c number

Income Proof: This is required only when you want to trade in Futures & Options. You can provide any one of these documents – Bank statements for 6 months,
Net-worth certificate, 3-months’ Salary slips, ITR statement, Demat holding statement or Holding report

Disclaimer :Investment in securities market are subject to market risk, read all related documents carefully before investing.

Reg Office:Bajaj Auto Limited Complex, Mumbai –Pune Road Akurdi Pune 411035. Corp. Office: Bajaj Financial Securities Ltd., 1st Floor, Mantri IT Park, Tower B, Unit No 9, Viman Nagar, Pune, Maharashtra 411014. SEBI Registration No.: INZ000218931 | BSE Cash/F&O (Member ID: 6706) | NSE Cash/F&O (Member ID: 90177) | DP registration No : IN-DP-418-2019 | CDSL DP No.: 12088600 | NSDL DP No. IN304300 | AMFI Registration No.: ARN – 163403. Website: https://www.bajajfinservsecurities.in/

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Demat Account FAQs

Demat Account is needed to hold the shares in digital mode. The shares are traded in stock exchange in digital mode only. So, any one who wants to participate in online share trading should have a Demat & Trading Account.

Dematerialization is the process of converting physical share certificates into electronic form.

It is just a change in the form of holding, it doesn’t lead to change of ownership.

There are mainly three types of Demat account –
1) Regular Demat Account - The Regular Demat Account is basically for investors who are Indian residents. This type of demat account doesn’t allow you to trade in F&O as its only for those who deals with requity shares.
2)Repatriable Demat Account – This Demat account allows securities to be repatriated outside the country. It is linked to an NRE (Non-resident external) bank account which allows funds (resulting from selling securities) also to be transferred outside India.
3) Non-Repatriable Demat Account – Here the securities are not allowed to be moved outside the country. This Demat account is linked to a Non-resident Ordinary (NRO) account which also does not allow funds to be moved outside the country. The transfer from NRE account for funds to NRO account is easy but the reverse is not true.

Any Indian individual above the age of 18 years can open an online Demat & Trading Account with BFSL. It is mandatory to have a PAN card, a bank account, and documents for identity and address proof.

BFSL provides you two segments to invest in which is Equities (Delivery & Intraday) and Equities Derivatives (Futures & Options).

BFSL has designed exclusive subscription packs for traders and investors with one of the lowest brokerage rates. Click here to know full details about the packs.

Yes, a Demat account can be opened jointly. It can have maximum of three holders – one main holder and two joint holders.

Yes, you can open multiple Demat accounts provided it is with different Depository Participants.

Yes, NRIs can open a demat account in India with requirement of PIS (Portfolio Investment Scheme) approval from RBI.

No, Demat account cannot be transferred. However, you can transfer the shares from one demat account to another with no change in ownership.

Yes. Demat account is mandatory to apply for an IPO in India as the shares are stored in digital or electronic form only if allotted as per SEBI regulations.

As the whole process to open a Demat account is digital now, it takes 8-12 hours to open the account once the application is submitted successfully and verified.

No, it is not mandatory to have a Demat account to invest in SIP.