How to Close Your Demat Account?

A Demat account is the digital equivalent of a locker for your securities. It holds shares, mutual funds, ETFs, bonds, and government securities in electronic form, making buying and selling easier. As of October 2025, India has over 21 crore Demat accounts, but a significant portion become inactive after initial trading interest wanes. When an account becomes dormant, investors often continue to incur Annual Maintenance Charges (AMC) or risk security misuse.

There are several situations where someone may want to close their Demat account. For example, the account may not be used for over 12 months, leading to unnecessary AMC charges. Some users may want to consolidate all their investments under a single broker for easier tracking and seamless customer support. Others may switch brokers to access better platforms, lower brokerage costs, or improved research tools. Additionally, security-conscious investors prefer closing inactive accounts to eliminate the risk of unauthorised transactions.

This blog provides a complete, step-by-step guide on how to close a Demat account — both offline and online. The aim is to give you the clearest explanation of demat account closure, along with a practical checklist, timelines, documents required, common edge cases, and FAQs.

Table of Contents

1. What is Demat Account Closure
2. Types of Demat Account Closures
3. Key Terms to Know Before Closure
4. Pre-closure Checklist
5. How to Close Demat Account: Step-by-Step
6. Additional Tips for Closing Your Demat Account
7. Common Scenarios & Edge Cases
8. Documents & Details You’ll Need
9. When Should You Consider Closing a Demat Account?
10. What Happens After Closure
11. Demat Account Closure
12. Conclusion
13. FAQs

What is Demat Account Closure

A Demat account closure refers to the formal process of shutting down an existing dematerialised account when it is no longer required by the investor. This is typically done when an individual has stopped trading, switched to another broker, or wishes to consolidate multiple Demat accounts for easier management. 

The closure ensures that all securities are transferred, no dues remain, and the account is fully deactivated as per regulatory norms. It is a straightforward, authorised procedure carried out through your Depository Participant. 

Types of Demat Account Closures

When it comes to closing a Demat account, there are generally 2 types of closures:

1. Basic Account Closure: This is when you have no holdings or pending payments. You can simply submit a request to your Depository Participant (DP) to close the account.
    
2. Transfer and Account Closure: If you still have securities in your account, you need to transfer them to another Demat account before closing it. This involves additional steps to ensure your investments are safely moved.

So, depending on your situation, you can either quickly close your account or transfer your assets to another account.

Key Terms to Know Before Demat Account Closure

Before you proceed with the closure, understanding a few important terms helps avoid delays:

• DP ID: The Depository Participant Identification Number is an 8-digit or 16-digit number assigned to your broker by NSDL or CDSL. It forms part of your complete Demat account number.
   
• Client ID: A unique 8-digit identifier linked to your individual account. Combined with DP ID, it becomes the full Demat account number.
   
• DIS (Delivery Instruction Slip) / Off-market transfer: A physical slip used to transfer securities from one Demat account to another without selling them. It is necessary when you still hold shares at the time of applying for closure.
   
• CML (Client Master List): A stamped document issued by the receiving Demat account (your new broker) showing account details. It is required during transfer of holdings.
   
• AMC (Annual Maintenance Charge): Yearly charge levied by your DP for maintaining your Demat account, typically ranging between ₹0–₹900+, depending on the broker.
   
• Dormant Account: A Demat account becomes dormant after 12 months of no transactions. Between 12-24 months, it can be reactivated on request. After 24 months, full KYC verification is required.
   
• Pledged Securities: Shares pledged as collateral for loans, margin or F&O trades. These must be unpledged before closure.
   
• Unused DIS booklet: A booklet of blank Delivery Instruction Slips issued by NSDL/CDSL. Many DPs require unused slips to be returned before closure.

Pre-closure Checklist: What You Must Do Before Requesting Closure

Closing a Demat account is straightforward only if all conditions are fulfilled. Missing even a single requirement may result in rejection.

1. Ensure Zero Holdings

Your Demat account must reflect zero securities. This includes:
• Shares
• Mutual funds
• ETFs
• Bonds
• SGBs
• NCDs
• REIT/InvIT units

You can either sell these securities in the market or use a DIS / off-market transfer to move them to another Demat account. Even a fractional quantity or unlisted share will prevent closure until resolved.

2. Settle All Dues and Charges

Brokers will not process a closure request if:
• AMC for the current year is unpaid
• There is a negative ledger balance
• Any debit charges for corporate actions, pledges or DP charges remain

Most brokers settle AMC quarterly or yearly. Checking dues beforehand avoids rejections.

3. No Active IPO Applications

You cannot close the account if you:
• Have applied for an IPO that is still in process
• Have pledged shares under margin trading
• Have an outstanding loan against securities

All pledged securities must be unpledged first.

4. Return Unused DIS Booklets

If you were issued a DIS booklet, your DP may ask you to return unused slips, particularly if the closure request is made in person.

5. Save All Important Records

Before closing your account, download:
• Transaction history of the past 3–5 years
• Holdings statement
• Capital gains statement
• Tax files or reports required for future filing
• Copies of DIS slips (if transfers were executed)

If you still hold shares, this guide explains how to transfer shares from one Demat account to another before submitting a closure request.

6. No Pledged Securities or Loans:

Unpledge all securities and ensure there are no loans or margin obligations linked to your holdings, as pledged assets block account closure.

7. Account Must Not Be Frozen:

If your account is frozen due to compliance, KYC, or regulatory issues, resolve them first. A frozen account cannot be closed.

These records are important for tax filing and for tracking past investments even after closure.

How to Close Demat Account: Step-by-Step Guide

4.1 Offline Closure (Traditional Method)

The offline method is the most widely accepted option and works for all account types — individual, joint, minor, HUF, NRI, corporate and trust accounts.

Step 1: Obtain the Demat Account Closure Form

Download the Demat account closure form / demat closure form / demat account closing form from your broker’s website, or request it from a nearby branch. Most brokers provide a PDF that can be printed and filled manually.

Step 2: Fill in Required Details

You must enter the following exactly as per KYC:
• DP ID
• Client ID
• Name and registered address
• Type of closure (simple closure or closure-cum-transfer)
• Reason for closure

Any mismatch in name, signature or address may lead to rejection.

Step 3: Attach DIS Slip + CML (If You Have Holdings)

If securities exist:
• Fill and sign a DIS slip to transfer them
• Attach the CML of the new Demat account
• Ensure the CML carries the DP’s stamp and signature

Inter-depository transfers (NSDL → CDSL or vice versa) take additional verification time.

Step 4: Attach KYC Documents (If Requested)

Although most brokers do not require additional KYC if DP ID and Client ID are valid, some may ask for:
• PAN copy
• Address proof (Aadhaar/Passport/Driving Licence/Voter ID)

Step 5: Sign the Closure Form

Signing rules depend on the account structure:
• Individual account → account holder signs
• Joint account → all holders must sign
• Minor account → guardian must sign
• HUF → karta must sign
• POA holder alone cannot sign unless authorised explicitly for closure

Step 6: Submit Form at Branch or Send Through Courier

You can submit the form:
• At the broker’s nearest branch
• By registered post / speed post / courier

Keep a photocopy of the form for tracking.

4.2 Online Demat Account Closure

Only a few brokers currently offer the functionality to close a demat account online. This method is faster but works primarily for standard resident individual accounts.

Step 1: Log in to Broker Portal / App

Navigate to:
Settings → Account → Close Account
or
Profile → Demat Services → Demat account closure

Step 2: Check Eligibility

Most brokers restrict online closure for:
• Joint accounts
• Minor accounts
• HUF accounts
• NRI accounts
• Corporate accounts

These require offline forms due to additional compliance.

Step 3: Ensure Zero Holdings and No Dues

The online system will prevent closure unless:
• All securities are at zero
• All dues are settled
• No pledge, SIP or IPO is active

The platform automatically displays issues if present.

Step 4: E-Sign the Closure Form

If your broker supports Aadhaar-based e-signing (via OTP), you can authenticate the form digitally. Some platforms allow digital signature using DSC tokens for advanced accounts.

Step 5: Upload Documents If Requested

This may include:
• CML for transfer-cum-closure
• Signed declaration for dormant accounts
• Soft copy of DIS (if used online)

Step 6: Submit the Request

Once submitted, you will receive:
• Acknowledgement on screen
• Email confirmation
• SMS confirmation (in most cases)

4.3 What Happens After Submission — Timeline & Confirmation

After the closure request is submitted:

Processing Time

Most brokers take 7–10 working days to complete the closure process. If holdings, DIS slips or KYC do not match, processing may extend to 15 days or more.

Confirmation from DP

Once approved, your DP sends an official confirmation via:
• Email
• SMS
• Physical letter (for some DPs)

This confirmation is your final proof of closure.

Login Deactivation

Your login credentials will stop working once the Demat account is closed. You may still access:
• Trading account (if separate)
• Tax reports (if supported)

The Demat number will show as inactive on NSDL/CDSL portals.

In Case of Account Closure

When you do not have any shares or securities in your Demat account, you don't need to transfer them. In such a situation, you can get the closure form directly and follow steps 3 to 5, as discussed above. 

Additional Tips for Closing Your Demat Account

Here are some things you might want to keep in mind during the closure process:

• Always keep copies of any forms submitted and correspondence regarding the closure.
• If you don't receive confirmation within 10 days, follow up with your DP to ensure everything is processed correctly.
• While most brokers do not charge for closing a Demat account, it's a good idea to confirm this beforehand.

Additionally, for joint Demat accounts, all account holders must sign the closure form. Meanwhile, for minor accounts, the guardian must initiate the closure with signed consent. In the case of HUF (Hindu Undivided Family) accounts, the Karta, or head of the family, is responsible for completing the closure process and providing any necessary documentation.

Choosing the next broker is as important as closing the old one. Review stock brokers features, account charges, and support quality before opening a new Demat account.

Common Scenarios & Edge Cases

Demat account closure is not always straightforward. Some cases require additional steps:

Joint Accounts
All account holders must sign the closure form. If transferring holdings, the target CML must list all joint holders in the exact same sequence.

Minor or HUF Accounts
For minor accounts, the guardian must sign.
For HUF accounts, the karta must sign and provide HUF declaration if requested.

Pledged Securities or Margin Positions
If shares are pledged:
• Request unpledge
• Wait for the broker to release holdings
• Ensure margin obligations are cleared

Unlisted, Delisted or Illiquid Shares
These cannot be sold easily. Options include:
• Rematerialisation
• Transfer to another Demat account
• Disposal if declared worthless by DP guidelines

Dormant Accounts With Dues
If AMC or other dues remain unpaid, closure will be rejected until settled.

Active SIPs or IPO Applications
Cancel ongoing SIPs linked with the Demat account. For IPO applications, wait until allotment or refund is processed.

Unused DIS Booklets
Return them to your DP to avoid misuse and close the documentation loop.

Documents & Details You’ll Need for Demat Account Closure

1. DP ID & Client ID
   These uniquely identify your account and ensure closure for the correct Demat number.
    
2. PAN and Address Proof
   Required only when your DP identifies KYC mismatches or account inactivity.
    
3. Demat Account Closure Form
   Mandatory for both online and offline closure. Always use the latest version from your DP.
    
4. DIS Slip + Target CML
   Required for transfer-cum-closure of securities. CML verifies ownership of the target account.
    
5. Signatures of All Account Holders
   This ensures legal compliance, especially for multi-holder accounts.
    
6. Documents for Pledged Securities
   Your broker may ask for margin release or pledge-closure confirmation.
    
7. Holding Summary & Transaction History
   Downloaded before closure to maintain personal investment records.

When Should You Consider Closing a Demat Account?

Closure makes sense in several practical situations:

Inactive or Dormant Account
If you haven’t traded or invested for over a year, you may be paying AMC unnecessarily. Closing avoids ₹200–₹800 annual charges.

Consolidation of Multiple Demat Accounts
Many users hold 2–3 accounts opened over time. Consolidating helps:
• Avoid multiple AMC charges
• Simplify portfolio tracking
• Reduce compliance burden

Switching Brokers
If you found a broker with:
• Lower brokerage
• Faster platform
• Better tools
• Zero AMC

You may want to switch and close the old account.

Before closing your Demat account to switch brokers, compare brokers with their brokerage charges, platforms, and services side by side to avoid making another costly choice.

Security Concerns
An unused Demat account can be targeted if the login credentials leak. Closure eliminates this risk entirely.

Change in Personal Profile
If your PAN changes (rare), residential status changes (e.g., becoming an NRI), or you shift permanently abroad, closing and reopening under a new status helps maintain compliance.

What Happens After Closure — Important Aftercare

Closure doesn’t end the responsibility. A few final steps ensure there are no future issues.

1. Download Final Statements
Keep copies of:
• Ledger statement
• Capital gains summary
• Last holding snapshot

These may be required for up to 6 years for income tax purposes.

2. Proof of Closure
Store your official closure email or letter safely. If there is any future dispute, this serves as proof.

3. Check PAN-Linked Demat Accounts
Use NSDL/CDSL services to confirm your closed account no longer appears under your PAN.

4. Monitor for Unexpected Debits
Occasionally, a DP may accidentally charge AMC after closure. Report such issues immediately.

5. Opening a New Demat Account
You can open a new account at any time using the same PAN. Some DPs may ask for fresh KYC if your last update was over 2 years ago.

Once your Demat account is closed, this step-by-step Demat account opening guide explains how to open a new account correctly and avoid documentation errors.

Demat Account Closure: Online vs Offline — Pros & Cons

Below is a simple comparison table for clarity:

Method	Pros	Cons / Limitations
Online (if supported)	Quick and convenient; no branch visit; e-sign facility	Available only for individual accounts; limited support for transfer-cum-closure; does not support pledged/unlisted shares
Offline (form + physical submission)	Works for all account types; supports transfer of holdings; handles complex cases	Requires physical forms; courier/branch visit; longer processing time; prone to manual errors

Conclusion

Closing a Demat account is irreversible, so it must be done carefully. The key steps include ensuring zero holdings, clearing dues, returning unused DIS slips and completing the closure form accurately. Whether you choose the online route or use a physical demat account closing form, ensuring all documents and signatures are correct will avoid delays.

Always download your transaction history and tax records before closure, and monitor your PAN-linked account list to confirm deactivation. If you genuinely no longer need the account, or you are consolidating under a better broker, closing your Demat account is a smart step towards simplifying and securing your financial life.

If you are planning your next investing step after closing a Demat account, Finology Select helps you analyse brokers, charges, and account options in one place.

FAQs: Demat Account Closure

1. Is there any charge to close my Demat account?
   SEBI mandates zero closure charges. Most brokers do not charge anything for closure as long as dues are cleared. 
    
2. Can I close my Demat account online?
   Yes, but only if your broker offers online closure. It mainly works for individual resident accounts. Joint, minor and HUF accounts typically require offline closure.
    
3. How long does it take to close a Demat account?
   Typically 7–10 working days, provided all documents and conditions are correct. Transfers may take extra time.
    
4. What if I have holdings in my Demat account?
   You must either sell them or use a DIS slip to transfer them to another Demat account before closure.
    
5. What about pledged or unlisted shares?
   Pledged shares must be unpledged. Unlisted or delisted shares may require rematerialisation or special handling by your DP.
    
6. What documents are required for closure?
   You need the closure form, DP ID, Client ID, and signatures of all holders. If securities are transferred, you also need a DIS and CML.
    
7. What if I have a joint or minor account?
   All joint holders must sign. Minor accounts must be closed by the guardian. HUF accounts must be closed by the karta.
    
8. Will I lose my transaction history after closure?
   You lose access through the broker portal, so download records beforehand. These are required for tax filing.
    
9. Can I open another Demat account with the same PAN after closure?
   Yes. You can open another account anytime since PAN rules allow multiple Demat accounts.