- Opening a Demat Account
- Fees Involved
- Where does one begin?
- How many shares you need to have to open a demat account?
- What will it cost?
- Nomination Possible?
- Transfer of Shares between Depository Participants
Opening a Demat Account
Answer: To open a Demat account an investor needs to open an
account with a Depository Participant registered with SEBI. For opening an
account investor needs to fill up an account opening form and submit copies of
the approved documents to serve as proof of identity (POI), proof of address
(POA) as specified by SEBI and PAN card in original at the time of opening of
account. All applicants should also carry original documents for verification.
DP also provides the investor with a copy of the agreement and schedule of
charges.After processing the account opening documents, the DP will provide an
account number (client id) to applicant. Once the account of an applicant is
opened with a DP, he/she becomes a client which is also called BO (Beneficiary
Owner) and the account number allotted to him is called BO-ID (Beneficiary
Owner Identification number).
Also, the In-Person Verification (IPV) of the applicant
should be carried out by the DP at the time of account opening. The staff of DP
should establish the identity of the applicant (guardian in case of minor) by
verifying the photograph affixed in the account opening form as well as the
proof of identity with the person concerned. In case of joint account, IPV
needs to be carried out for all the holders of the account.
Demat
services are currently offered by most of the broking houses, as well as
several financial and banking institutions. The entities offering depository
services are known as depository participants. By definition, a depository
participant is an intermediary between depositories, like NSDL and/or CDSL, and
an investor.
Fees Involved
Answer: To open a demat account you need to pay certain fees.
This fee is divided into four major heads:
• Annual
maintenance fee
• Custodian
fee
• Transaction
fee
All the charges vary from one DP to another.
Annual maintenance fee
This fees is levied for maintenance of account.
Transaction fee
The fee is levied for debiting securities to and from the
account on a monthly basis. While some DPs, charge a flat fee per transaction,
others peg the fee to the transaction value, subject to a minimum amount. The
fee also differs based on the kind of transaction (buying or selling). In
addition to the other fees, the DP also charges a fee for converting the shares
from the physical to the electronic form or vice-versa. This fee varies for
both demat and remat requests. For demat, some DPs charge a flat fee per
request in addition to the variable fee per certificate, while others charge
only the variable fee.
Where does one
begin?
Answer: First step is to open an account with a DP. Most of the
broking houses, as well as several financial and banking institutions offer
depository services and thus are also known as depository participants. It's
not necessary to have DP of your broker, but many brokers incentivize their
clients by offering lower charges for opening demat accounts with their DPs.
Here is a broad list of documents you may need for opening
an account (you won't need all of them though):
Proof of Identity
o PAN card
o Voter's
ID
o Passport
o Driver's
license
o Bank
attestation
o IT
returns
o Electricity/
Landline phone bill
o ID cards
with applicant's Photo, issued by
a. Central/State
Government and its Departments,
b. Statutory/Regulatory
Authorities,
c. Public
Sector Undertakings,
d. Scheduled
Commercial Banks,
e. Public
Financial Institutions,
f. Colleges
affiliated to Universities (this can be treated as valid only till the time the
applicant is a student)
g. Professional
Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members and
o Proof Of
Address:
I. Ration
card
II. Passport
III. Voter ID
Card
IV. Driving
license
V. Bank
passbook / Bank Statement (NSDL/POLICY/2007/0074 dated December 1, 2007 and
NSDL/POLICY/2008/0037 dated May 27, 2008)
VI. Verified
copies of
a. Electricity
bills (not more than two months old),
b. Residence
Telephone bills (not more than two months old) and
c. Leave
and License agreement / Agreement for
Only photocopies of the documents are required for
submission, but originals are also required for verification. The applicant
also needs to submit a passport size photograph with the account opening form.
How many shares you need to have to open a
demat account?
Answer: A demat
account can be opened with no balance of share and there is no minimum balance
to be maintained. You can also have zero balance in your account.
What will it cost?
Answer: To open a
demat account you need to pay certain fees. this fee is divided into four major
heads: 1.) Annual maintenance fee 2.)Transaction fee. All the charges vary from
one DP to another.
Nomination Possible?
Answer: Yes,
nomination is possible you can have a nominee of your choice by filling up the
nomination details in the account opening form. This enables the nominee to
receive the securities after the death of the holder of the demat account.
Transfer of Shares between Depository
Participants
Answer: Transfer
of shares is possible, you need to fill the Deliver yInstruction Slip Book
(DIS) and submit the same to your DP for transferring your shares from one DP
account to another.. However you need to check, whether both Demat account's
Depository Participant is same or not(CDSL or NSDL) If both of them are
different, then you need an INTER Depository Slip (Inter DIS). If they are
same, then you need INTRA Depository Slip (Intra DIS).
Do try to submit that DIS when market is on. Accordingly,
date of submission of DIS and date of execution of DIS can be same however
difference of one day is also acceptable. For transfer, you also need to pay
the broker some charges.
