Demat account is a regularly used term in the world of trading and investment. The numbers of these accounts have been going up tremendously and scaled new heights with proximity to 4 million Demat accounts opened in 2018 and a 20% increase from the previous year.
We have observed the drastic shift in the saving strategies of Indians from traditional to alternatives such as stocks emerged profoundly.
Now, increasing demand for these accounts has also led to depository participants offering the best features at a minimal price thus profiting investors. In addition, SEBI ordered holding a Demat account for stock market trading.
Demat Account in India: Understanding the Basics
First, need to understand three critical terms in this subject for a great comprehension of the Demat account in India.
It is a process that works with the change of offer authentications from physical to electronic structure. Shares held from that point are simpler to oversee while giving greater availability from any place all over the planet. Dematerialisation likewise permits you to screen and track your possessions flawlessly, speedily.
A Depositary participant goes about as a delegate or specialist of a central depository and gives namesake administrations to services to investors and traders. India presently has two central depositories enrolled with the apex trading and investment administrative body SEBI.
Depository Participant must be enlisted with any of these two authorized administrators.
Special 16-digit client ID
Each Demat account is allotted with a one-of-a-kind 16-digit client ID known as the investor’s identity. The initial 8 digits of the ID address the depository participant while the last 8 digits go about as a unique identification proof of investor, working with sale or purchase of offers and securities.
Also Read: How to Choose the Best Demat Account
Open a Demat Account in 4 Steps:-
Step 1: Apply For A Demat Account Online
To open your free Demat account via SMC Global’s application or website, submit your phone number and email in the form.
Step 2: Submit the KYC Details Online
To enlist you with the depository participant, and to open a free Demat account on the web, satisfying KYC (Know Your Client) formalities is compulsory. You can submit your KYC details on the site or on the mobile app.
Step 3: Get Your Documents Verified
Once you have completed your KYC submission on the web, your depository participant client will confirm your KYC details to ensure transparency.
Step 4: Acquire Beneficiary Owner Identity (BOID)
After processing your application, you will get a unique 16-digit Demat account number (BOID) from the DP. When you get your BOID, you have effectively opened a Free* Demat account with SMC Global Securities.
Documents Required for Opening a Demat Account
The documents required in opening a Demat account are the least. This makes it simpler so that new candidates could own the interaction from beginning to end without having hassles. They simply expected you to submit the following documents.
- Identity proof: A copy of your PAN card with your photograph
- Address evidence: A copy of the below records will fill in as confirmation of your home.
- Voter ID Card
- Registered lease agreement
- Driver’s permit
- Adhaar card
- Landline phone bill
- Power bill
- Apartment maintenance bill
- Copy of your insurance
- Ration card
- Gas bill
- Bank passbook or account statement (not more than 90 days from the date of receipt of documents)
- Ledger verification or Bank account proof: A Copy of your financial balance passbook or bank statement (not more than 90 days)
- Proof of your income: A copy of your most recent salary slips or your Income Tax Return (obligatory for currency and derivatives section)