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Thursday, April 25, 2024

What Is Demat Account And How Long Does It Take To Open It?

A demat account is an electronic vault where you can store all the market-linked financial instruments in a digital form. It acts as a medium for trading and investing smoothly in the stock market. When you purchase stocks or any other securities, they get credit to your demat account in T+2 days. When you sell these shares, they get debit from your demat account in T+2 days. You must monitor the credit shares and debit shares closely to avoid any discrepancies and losses. 

How much time is required to complete the account opening process?

If you are opening a demat account for the first time, it is obvious to be inquisitive about the time require to complete the account opening process. However, it largely depends upon whether you opt for the offline or online process. The verification round can be complete in a couple of hours when it is carry out online. You are allow to upload your signature digitally and the in-person verification is done through video conferencing. Therefore, the online process is much more convenient and faster. 

If you prefer the offline process, it may need 48 to 72 working hours to complete the entire process. The in-person verification round and other formalities make the offline procedure longer. Also, you don’t need any assistance from a broker to complete the online account opening process. However, to ensure a quicker process, you must keep the following documents ready:

  • PAN Card Copy
  • Identity proofs like Aadhaar Card, Voters ID, Passport, Driving Licence, etc. 
  • Address proofs like water bill, electricity bill, or phone bill.
  • Bank statement, salary slips of last 3 months, or Form 16 to verify your financial condition 
  • Cancell cheque to verify your bank details 

The process could be longer if you don’t have sufficient documents to confirm your identity, address, or financial eligibility. If the account opening process is getting unnecessarily delaye, contact the broker or track the application status using the reference ID that was provide after submitting the application. Your application will be reject if the details provide through the application form and the details available in the documents do not match. 

A mismatch signature or insufficient documents can be the reasons behind the delay in process. In such cases, you may have to visit the broker personally and provide the accurate details. The demat account will be activate as soon as the issue gets resolve. It is recommend that you cross-verify the details that you fill in the form by matching it with the details present in your documents. 

How to open a demat account?

A detail step-by-step process to open a demat account has been given below for your reference:

Step 1: Choose a DP

Choose a DP (Depository Participant) who is register with NSDL or CDSL after going through the brokerage rates and demat services they offer. 

Step 2: Fill the application form 

Visit the official website of a DP and fill an application form with personal and financial details. 

Step 3: Upload documents online

Upload the documents that verify your income, address, and identity. Go through a physical verification round or opt for the online verification. 

Step 4: Upload digital signature and photograph 

Upload the signature and photograph online. You will also be ask to sign a contract that contains the rights and duties of investors and the DP. 

Step 5: Get the Beneficiary Owner Identification (BO ID) Number 

A 16-digit unique BO ID will be sent on your register mobile number or email address after signing the contract provide by the DP. 

Demat account opening charges will depend on the DP with whom you have open the demat account. Most DPs offer a free demat account to encourage trading. You also need a trading account to place buy and sell orders. However, there is no need to adhere to a separate process to open a demat account as most brokerage platforms provide it along with the demat account.


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