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Demat Account Opening

🤔 HOW TO OPEN DEMAT ACCOUNT ONLINE

Step by Step Guides

Do you think opening demat account is a herculean task? No, definitely not. Yes, they are complex, but our step by step guides make them easy like anything. Go on and choose a broker.

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Demat Account Opening Process

Click on PDF Icon to download as PDF, click on Account Opening Guide to view the guide online or click on Full Details to read full review of a broker from this list.

Groww

Groww

Account Opening Charge

Free
Zerodha

Zerodha

Account Opening Charge

Free
Angel One

Angel One

Account Opening Charge

₹0
Upstox

Upstox

Account Opening Charge

₹0
ICICI Direct

ICICI Direct

Account Opening Charge

₹0
HDFC Securities

HDFC Securities

Account Opening Charge

₹0
Kotak Securities

Kotak Securities

Account Opening Charge

₹0
Motilal Oswal

Motilal Oswal

Account Opening Charge

Free
Paytm Money

Paytm Money

Account Opening Charge

Free
5paisa

5paisa

Account Opening Charge

Free
IIFL

IIFL

Account Opening Charge

Free
Axis Direct

Axis Direct

Account Opening Charge

₹ 499
Dhan

Dhan

Account Opening Charge

Free
Choice

Choice

Account Opening Charge

Free
Nuvama

Nuvama

Account Opening Charge

Free
FYERS

FYERS

Account Opening Charge

Free
m.Stock

m.Stock

Account Opening Charge

Free
Alice Blue

Alice Blue

Account Opening Charge

Free
Anand Rathi

Anand Rathi

Account Opening Charge

Free
Espresso Sharekhan

Espresso Sharekhan

Account Opening Charge

Free
Shoonya

Shoonya

Account Opening Charge

Zero
Samco

Samco

Account Opening Charge

Free
Bajaj Broking

Bajaj Broking

Account Opening Charge

Free
TradeSmart Online

TradeSmart Online

Account Opening Charge

Free
Stoxkart

Stoxkart

Account Opening Charge

₹0

In today's digital age, investing in the stock market has become more accessible than ever, and one essential tool every investor needs is a Demat account. Whether you are a beginner or a seasoned trader, having a Demat account makes managing your investments seamless, efficient, and secure. But with multiple options available, many people ask, how do I open a Demat account or which is the best Demat account for me?

This detailed guide walks you through everything you need to know—from understanding a Demat account and its benefits to a step-by-step process on opening a Demat account online.

What is a Demat Account?

A Demat account, short for "Dematerialised account" is an electronic account used to hold financial securities such as stocks, bonds, mutual funds, and other assets in digital form. Before the introduction of Demat accounts, physical certificates were required to prove ownership of shares. However, with the advent of technology, holding securities electronically has simplified trading and investment processes.

Key features of a Demat account include:

  • Safety and Security: No risk of losing physical certificates.

  • Simplified Trading: Quick and easy buying, selling, and transfer of securities.

  • All-In-One Management: You can hold multiple types of investments (stocks, bonds, mutual funds) under one account.

Why Do You Need a Demat Account?

Investing in the stock market without a Demat account is almost impossible today. Here are the key reasons why opening a Demat account is essential:

  1. Safe Storage of Investments: Your shares are stored digitally, ensuring their safety from damage, theft, or loss.

  2. Easy Access to Trading: A Demat account allows you to trade seamlessly. Buy or sell shares with a few clicks without dealing with the physical exchange of documents.

  3. Participation in IPOs and Bonds: Having a Demat account is necessary if you want to invest in Initial Public Offerings (IPOs) or government/corporate bonds.

  4. Ease of Transfer: You can easily transfer securities between accounts and to other investors without paperwork hassles.

  5. Portfolio Consolidation: A Demat account lets you hold all your financial assets in one place, giving you better control and visibility over your investments.

Types of Demat Accounts

Before opening a Demat account, it's important to understand the types available based on your needs:

1.   Regular Demat Account: Best suited for Indian residents who want to trade shares, bonds, and mutual funds.

2.   Repatriable Demat Account: This type of Demat account allows NRIs (Non-Resident Indians) to transfer funds abroad. It requires linking with an NRE (Non-Resident External) bank account.

3.   Non-Repatriable Demat Account: NRIs can use this account to invest in India, but funds from this account cannot be repatriated. It must be linked with an NRO (Non-Resident Ordinary) bank account.

Documents Required for Demat Account Opening

Before you open a Demat account, make sure you have the following documents ready for a smooth and hassle-free process:

  • Proof of Identity (POI): Aadhaar card, PAN card, Passport, Voter ID, or Driving License.

  • Proof of Address (POA): Utility bills, bank passbook, ration card, or property tax receipt.

  • Proof of Income: (For trading in derivatives) Salary slips, bank statements, or income tax returns.

  • Bank Account Details: Cancelled cheque or bank statement.

  • Passport-sized Photographs: 2–3 recent photos for documentation.

How to Open a Demat Account Online: Step-by-Step Guide

1. Choose the Right Broker: To begin, it’s crucial to pick the right stockbroker or financial institution. You want to choose a broker offering the best services tailored to your needs, such as low brokerage fees, user-friendly platforms, and good customer support. With Finology Select, easily compare the best Demat accounts available to make an informed decision. make it easier by comparing With Finology Select, easily compare the best Demat accounts available to make an informed decision.

2. Submit Your Documents: To open a Demat account, you’ll need to upload the required documents for KYC (Know Your Customer) verification. Most online platforms allow you to submit documents electronically, ensuring a quick and easy process.

3. Complete the Demat Account Opening Form: Fill out the application form online. Ensure you provide accurate details such as name, address, contact details, and PAN information.

4. Verification Process: After submission, your broker will conduct a KYC verification to ensure your identity and eligibility. Some brokers offer video KYC for faster processing.

5. Receive Your Demat Account Number: Once your verification is complete, you will receive your Demat account number, also known as Beneficiary Owner Identification (BO ID). This number is required to manage your securities.

How can Finology Select help you open a Demat account?

While the Demat account opening process is relatively simple, choosing the right broker can be challenging due to the multitude of options. This is where Finology Select can help:

  • Compare Top Brokers: Finology Select curates a list of the best Demat accounts tailored to your preferences. Whether you prioritize low brokerage, better customer support, or advanced trading platforms, they provide side-by-side comparisons to help you decide.

  • Brokerage Cost Breakdown: Selecting the wrong broker may lead to excessive fees. Finology Select offers a transparent comparison of brokerage fees and hidden charges, ensuring you pick an account that suits your budget.

  • KYC Assistance: The platform guides you step-by-step through the KYC process, making document submission and verification seamless.

By using Select’s powerful comparison tools, you can easily find and open the best Demat account for your needs.

Benefits of Opening a Demat Account Online

Opening a Demat account online has never been easier. Here are some key benefits:

  1. Convenience: You can complete the entire process from the comfort of your home without visiting any physical branch.

  2.  Faster Account Opening: Online processes are much quicker, with most brokers offering same-day account activation.

  3. Seamless KYC: Video KYC or Aadhaar-based e-KYC makes verification quick and paperless.

  4. 24/7 Access: Once your Demat account is open, you can access it anytime, anywhere using your smartphone or laptop.

  5. Lower Costs: Many brokers offer lower fees and charges for accounts opened online compared to traditional offline methods.

How to Choose the Best Demat Account?

When it comes to choosing the best Demat account, consider the following factors:

  1. Brokerage Charges: Some brokers charge a percentage of your trade value, while others charge a flat fee. Choose a broker with a fee structure that matches your trading volume.

  2. Account Maintenance Fees (AMC): Check whether the broker charges an annual fee for maintaining your Demat account. Some brokers offer zero AMC for the first year or for certain types of accounts.

  3. User Interface and Trading Platform: Opt for a broker that offers an intuitive and easy-to-use trading platform, whether through a mobile app or web interface.

  4. Customer Support: Reliable customer support can make a big difference, especially for new investors.

  5. Additional Services: Some brokers offer value-added services such as research reports, stock recommendations, or advisory services to help you make informed decisions.

Frequently Asked Questions

Demat account or dematerialized account is an account that holds financial securities, both debt & equity, in electronic form. Demat accounts can be used to hold equity shares, ETFs, mutual funds, bonds, and government securities. Demat accounts are just like banks, wherein every buy and sell gets credited or debited directly into the account. Basically, whenever you buy a stock, the shares get credited to your demat account.

For opening a demat account and trading account, you need to be at least 18 years old. In case you are a minor, a legal guardian will be required for opening the account. Despite your age, this will allow you to operate in shares and securities.

 

Additionally, you will require a pan card for opening a demat account. The following steps are to be followed to open a demat account:

 

  1. For opening a demat account, contact the depository participant or DP, the details of which can be obtained from the official Central Depository Service or National Securities Depository Limited. For opening a trading account, approach a stock broker or broking firm. 

  2. Provide proofs such as address proof, PAN card, ID proof, etc. and fill in the KYC form. 

  3. In the case of a Demat account, you will be required to sign an agreement. Do not forget to get a copy of the same. 

  4. For a trading account, you will have to undergo a verification process. 

  5. After a few days, your trading and demat account will be set and ready to be activated and used.

Yes, you can open a Demat account online. As a matter of fact, online stock brokers are a preferred choice for beginners when they wish to start investing. Most of the demat account documentation is also submitted online which eases the whole process. But the Power of Attorney needs to be signed in its physical format. It is usually received in the mail and needs to be sent back to the brokers.

Usually, it is a common misconception that minors cannot enter the stock market, there is no such thing as an age limit when it comes to investing. Both adults and minors are allowed to open Demat accounts. With minors, once the guardians provide with the required documents, the account can be opened under their name also. Thus, there is no maximum or minimum age for opening a Demat account.

The demat account charges differ from DP to DP and the value of transactions. Starting from Rs 200, these charges also depend upon the value of holdings that the demat account owner possesses. 

Apart from charges for opening a demat account, there might also be an annual maintenance charge and transaction fees for your demat account, which again, will differ from DP to DP.

Demat account opening fees may affect the investor's decision related to whether to open an account or not. To reduce this pressure many brokerage institutions take no charge for opening an account. Account opening charges can be free but the company's annual maintenance charges vary with each demat account.

It is possible to open a demat account without aadhaar card, but it can only be done offline. However, when opening the demat account online, it is advisable to use an e-aadhaar card for seamless and quick verification of the necessary details.

 

Currently, it is not mandatory to link the Aadhar card with the demat account, yet it can be submitted as a valid identity proof along with mandatory proof of address and proof of income by submitting any of the following documents:

 

  • Proof of Identity:

PAN card with a valid photograph.

Voter ID card / Passport / Driving Licence/ Aadhaar card.

Identity card with a valid photo, Public Sector Undertakings, Scheduled Commercial Banks etc.

  • Proof of Address: 

Passport/ Voter’s Identity Card/ Ration Card/ Registered Lease document or Sale Agreement of Residence/ Driving License/ Flat Maintenance bill/ Insurance Copy.

Bank Passbook which is not more than three months old.

Utility bills like landline telephone bill, electricity/ gas bill which is not more than three months old.

Self-declaration of the new address given by judges of the High Court or Supreme Court.

Address proof which is issued by bank managers of Scheduled Commercial Banks/ Scheduled.

Cooperative Bank/ Multinational Foreign Banks, Gazetted Officer / Notary public, Member of Legislative Assembly, Member of Parliament.

Identity card containing address which is issued by Central/ State Government and its Departments, Statutory/ Regulatory Authorities, PSUs, Scheduled Commercial Banks etc.

  • Proof of Income: 

Salary Slip of the current month or Form 16.

Photocopy of the Income Tax Return (ITR) acknowledgement slip submitted to the Income Tax Department during tax filing.

Latest statement of a bank account containing the income history of the last 6 months.

Certificate of Net Worth or photocopy of the annual statement of accounts authenticated by a Chartered Accountant.

A statement of Demat Account holdings with an eligible DP.

The demat account charges differ from DP to DP and the value of transactions. However, unlike individual investors, private companies do not have the option to open a demat account online; rather they can only open the account through an offline process. 

 

The documentation required to open the account is quite different as compared to individual investors and with the required documentation and process, a private limited company can participate in the buying and selling of shares in the stock market. 


However, it is important to ensure that it is in line with the company’s Articles of Association (AOA) & Memorandum of Association (MOA) and it complies with RBI regulations.

Features of Demat account:

  • Converts physical share certificates into electronic form easier and faster. If required, electronic forms of securities can also be converted into physical certificates.

  • Easy freezing of Demat accounts by the holder to prevent any unwanted credit or debit of shares.

  • Shares can be easily and smoothly transferred through DIS (Delivery Instruction Slip) and RIS (Receipt Instruction Slip).

  • DIS slip also can be sent to the depository participant online instead of manual transfer.

  • Demat accounts provide easy access and account holders can check on their account through smartphones, computers, laptops, basically with any device that has an internet connection.

 

Benefits of Demat account:

 

  • Offers secure storage for your stocks, hence reducing the risk of forgery and loss/damage.

  • Ensures a seamless and swift transfer of shares. Once you've secured a trade, those shares are transferred automatically to your account.

  • Trading can be done on the go, even with your smartphone.

  • Eliminates the costs of registrations like stamp duty and handling charges

  • Eliminates excessive, lengthy paperwork.

Once you’re done with the initial process by submitting the complete account opening form and have uploaded all the documents for verification, it takes about 12-24 hours for the demat account to open.

However, the maximum time bracket under which the Demat account gets activated is around 48 hours to 72 hours. This can also depend on the stock broker or institution.

Linking the two accounts makes transactions easier as you will not have to provide the details of your Demat account, every time you make a transaction. Hence, you can link the Demat account with the trading account. 

After linking, once the order is placed through the trading account and processed, the shares will automatically be debited and credited from your linked Demat account.

For indulging in the trading (buying and selling) of shares, it is mandatory to open a trading account. However, a trading account cannot hold shares in it and is not associated with any depository. 

A demat account is required for holding/storing the stocks that one owns, which is why a trading account cannot be opened without having a demat account.

Hence, it is not possible to buy or sell shares without having a demat account.

Yes, the Demat account from one stock broker can be transferred to another stock broker and it is quite an easy process. If the account is transferred between the same depository service provider (CDSL or NSDL), then the investor can themselves do the transfer electronically. In case the new broker has a different depository service provider (say, going from CDSL to NSDL) then the physical form needs to be filled and submitted with the previous broker.

Following are some of the key differences between the 2-in-1 account and 3-in-1 accounts:

  1. Type of account:

The 2-in-1 account refers to a trading account and Demat account, whereas the 3-in-1 account refers to the trading, demat and bank accounts.

  1. Ease of Transactions:

In 2-in-1 accounts, the transactional process between the 2 accounts is manual in nature. However, when it comes to the 3-in-1 accounts, the transactions are easier and convenient among the 3 accounts.

  1. Brokerage Charges:

The brokerage charges in the 2-in-1 accounts are lower as compared to 3-in-1 accounts. Sometimes, brokers also offer flat rate discount brokerage plans. 

In 3-in-1 accounts, the brokerage charges are more expensive. The brokerage is charged on the percentage of turnover.

Unused Funds:

In 2-in-1 accounts, the unused funds stay in the trading account, whereas in the 3-in-1 accounts, the unused funds stay in the linked savings bank account.

  1. Interest on the unused funds:

In the 2-in-1 accounts, no interest is earned on the unused funds stored in the trading account.

In the 3-in-1 accounts, some interest is earned on the unused savings account balance.

  1. Best suited for:

The 2-in-1 accounts are best suited for frequent and casual traders.

For the market beginners and casual stock market investors, the 3-in-1 account is more suited.