What are the Steps to Open Demat Account Online?
Electronic share trading mandates every stock market investor to have a demat account. So, if you wish to invest in shares, you must get a demat account. Thankfully, you can open demat account online, and the procedure to do so is very straightforward. However, before learning how to open a demat account, you must understand why this account is so important.
What is The Function of a Demat Account?
To make things easy, you can compare the function of a demat account to that of a savings account you would open with your bank. You know that you require a savings account to store your money and keep it safe. If you need cash, you can withdraw money from your savings account. A demat account does something similar: instead of money, it stores your shares electronically. So, if you purchase the shares of a publicly traded company, the shares get transferred to your Demat account. Those shares will remain secure in your demat account until you decide to sell them. A demat account can hold different securities like shares, mutual funds, exchange-traded funds, debt securities, etc.
How to Get Yourself a Demat Account?
In India, two depositories, the NSDL and the CDSL, provide demat account services. NSDL is an abbreviation for National Depository Services, while CDSL stands for Central Depository Services Limited. However, as a retail investor, you cannot approach these depositories directly if you want to open a demat account. So instead, as a retail investor, you open a demat account in India with depository participants. Depository participants are stockbrokers who have obtained the licence to provide demat account services from the depositories and SEBI (Securities Exchange Board of India).
So, if you want to open a demat account in India, you can do so from the website of a stockbroker registered as a depository participant. However, the top stockbroker’s in the country provide several other benefits and services along with the essential demat account services. For example, Kotak Securities provides its clients with stock recommendations and research reports. So, you might want to research brokers before selecting one.
Steps to Open a Demat Account
The leading stockbrokers have also made the Demat account opening process shorter and simpler. They have eliminated the need for paperwork and have kept the entire process online from start to finish. So to open a demat account online, you first select a stockbroker. Then, you either head to their website or download their stock trading app on your Android or iOS device. Once you do that, you must go through 4 simple steps to get a Demat account.
Step 1: Verify Your Mobile/Email
On the website of the depository participant, you will see a prompt to open a demat account. Likewise, if you are on your one on the app, you see an option to log in or to open demat account. Select the latter. Then, you enter your mobile number and email address. You will receive an OTP (one-time password) via SMS and Email to verify the provided credentials.
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Step 2: Enter Your Personal Details
The next step requires you to enter personal details, starting with your PAN and date of birth. After that, you continue entering your details, bank details, address related details. Personal details include your father’s name, occupation, etc. In comparison, Bank details require you to provide your account number and IFSC code. The broker may then automatically fetch your address; if not, enter it manually.
Step 3: Upload Your Documents with Digi Locker
This step requires you to click a selfie. You can click a new one or upload a pre-existing one. Likewise, you have to do the same with your signature. If you wish to trade derivatives, you can opt for that segment; however, that will require you to provide your salary slip or bank statement details.
Step 4: e-Sign
After submitting your documents, select the option “e-Sign & Submit form.” You will land on the NSDL website, where you enter your Aadhaar card number, accept the terms, and e-sign. You will receive an OPT on the phone number linked to your Aadhaar card. Enter it, and the broker will review your application, after which you will receive your demat account login credentials on the provided email address.
Most brokers typically send you your login credentials within 24 hours of submitting your application. You can then log in using those credentials. You can log in on the stock trading app or the website and start investing in shares and other securities.
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