Are you planning to enter the markets? If you are, your processing should start with opening a new Demat account. It makes your entire procedure of buying and selling investment instruments seamless. But being naive in this domain, you may need a little guidance with everything. To help you, we have made a step by step guide on how to open Demat account, which will let you start your new journey in no time.
Step 1: Depository Participant Selection
There are two significant depositories in India, The Central Securities Depository Limited (CSDL) and The National Securities Depository Limited (NSDL). Being an investor, you cannot work directly with these two depositories. That is where the role of a mediator or a depository participant comes into play.
It can be a bank, a custodian, or a share broker, who makes your trading with the two major depositories easy. There are several mediators available in the market. You can choose one based on some recommendations or by checking reviews. Select wisely, as you will be opening your Demat account with them.
Step 2: Fill Out The Form
Once you have chosen a depository participant, the remaining work becomes convenient. According to the available options, you can either visit their office or start the process online. For the very first action, you would need to fill out an application form. The form will require you to provide all your personal and professional information. You may also need to verify your mobile phone number through an OTP, especially when you are doing this online.
Step 3: Grab Documents
You can check on the depository participant’s website or call an agent to inquire about the documents required for Demat account. They will inform you about their individual requirements for opening a Demat account. Some general documents everyone asks for are:
Identification Proof: It can be your Aadhar card or any other document that verifies your identity.
Income Proof: You may need to submit some documents that support the amount of income that you have mentioned in the forms.
Address Proof: You will have to include a proof of the permanent address, which you must have entered in the application form.
Along with these, there can be several other documents that you will need to submit for opening a Demat account. So, it will be convenient for you if you keep all of them ready.
Step 4: Document Verification
The world is full of frauds. That is why your depository participant will not instantly believe in the documents provided by you. They will conduct a verification process to ensure everything is genuine, and you are not creating a faux account. In case you have filled out the form online, you may also need to visit their office for verifying yourself. There is nothing to stress here if you have provided them with all the real documents and information.
Step 5: Account Details
After verifying everything thoroughly, your account will finally be opened. You will receive your account details, such as a unique account number, online password, etc. You can then access your account and start trading immediately.
These were the necessary five steps you will need to follow for opening a Demat account. You may need to go through a few more steps in the process, depending on your depository participant’s requirements.