Some Commonly Asked Questions About Demat Account

Are you confused about various terms related to Demat account? Mentioned in this post are some questions commonly asked by new to-be investors on the subject. Keep reading.

If you want to trade shares, you will need a Demat and Trading account. While earlier, shareholders had to maintain physical documents of their holdings, a Demat account lets you convert all your holdings in electronic format and keep them safe. Let us look at a few commonly asked questions related to Demat and Trading account.

What is Demat and Trading Account?

While a Dematerialised account lets you hold the securities that you have procured, a trading account lets you place buy and sell offers on the securities. Also typically known as a 2-in-1 account, a Demat and Trading account offers seamless integration between the two accounts to let you buy, sell, and hold the securities in real-time.

Who is a Depository Participant

A Depository Participant or DP is a financial institution or a brokerage firm that acts as an intermediary between the depositor and the investor. Currently, there are two depositors in India; NSDL and CSDL. A DP offers seamless transactions of securities and holds the securities owned by the investor securely. A DP needs to be authorised SEBI.

What are the Documents Required to Open a Dematerialised Account

The document required for opening a Dematerialised account depends on the type of account you’re opening. For instance, you can open a Resident Indian account, NRI Account, HUF account, Corporate account, etc. The documents would vary based on the type of account you are opening. For opening a resident Indian account, PAN card, address proof, and identity proof. Income proof is necessary if you also want to operate in the derivatives and currency segment.

Can a Dematerialised Account be Opened in the Name of a Minor?

While a Dematerialised account can be opened in the name of a minor, it cannot be linked to any trading account. The account can be managed by the natural or legal guardian of the minor. Once the minor turns 18, the minor account becomes inoperative, and all the holdings are transferred to a new account.

How to Link Adhaar Number to the Dematerialised Account

A dematerialised account needs to be linked to Adhaar details as per SEBI (Securities Exchange Board of India) guidelines. You can link your Adhaar number to the Demat and Trading account by logging into the NSDL portal and following the process as directed. You will need a few details handy, such as DP ID, account ID, PAN, and Adhaar number. You will also need to provide your mobile number during the process. Make sure your Adhaar number is linked to this mobile number as you will get an OTP in your Adhaar-registered mobile number. 

Open a Dematerialised Account with a Trustworthy DP

A Demat account with a trustworthy partner can help you trade your holdings seamlessly. If you still have any questions regarding a Demat and Trading account, get in touch with a SEBI-approved DP to get complete clarity. Once you have found a trustworthy partner, open a Demat and Trading account and begin your investment journey.