Demat account is an important account for storing the security in the form of shares, bonds and debentures. This account is formed by a depository that tries to enforce the ownership of the shares against the investor. This Demat account can be opened after complying with certain regulations and the procedures which have been enforced by the securities and exchange Board of India.  Want to know more? Read on to understand What is a Demat account?

 

Need of demat account

All of these essential factors have become important to deliver financial literacy and confidence to the investors. The hassle free procedure to open a demat account allows investors to safely invest their shares and store them in the Demat account. This article will try to summarise the procedure for opening a demat account online. 

Get in touch with a depository

The first step to open a demat account is to get in touch with the depository. India has two depositories for the time being. An investor can go with either of the depositories. After reaching out to the deposit, the investor should be vocal about the development of a demat account.

 The depositary would transfer the investor to an account opening form. This account opening form would comprise all kinds of details. It is important for the investor to fill all the required details as required by the form. Start trading with 5 paisa today and know the tricks to enjoy a growth in your capital. 

File the documents

The next step is to find all the essential documents with the depository. The important documents which need to be deposited include identification cards which can be a pan card or Aadhar card. It also includes the details like your banking account and the IFSC code. 

Additional details which are related to annual income of the individual should also be displayed on the screen. Personal details like mobile number, email address, mother’s name , father’s name, occupation and nationality play a vital role and must be disclosed to the depositary before proceeding ahead. 

Verification

The verification of the investor is really important before proceeding ahead with the opening of the Demat account. The Representation of the deposit  would get in touch with the shareholder to confirm all the details that he has disclosed on the account opening form.

 It has to verify that the person is not committing any kind of fraud and everything is happening within the ambit of law. Distance education is an important part and it usually takes some time. 

Activation of demat account

Once all the details have been shared with the depositary and the verification has also been completed then the depositary if satisfied can activate the Demat account. 

Once the Demat account has been activated the investor would be required to transfer all the shares held in the physical form to the dematerialised form. A demat account number would also be generated. 

Conclusion

Once all of these steps have been accomplished the Demat account can be easily operated. The investor can be in the position to generate a huge amount of potential if he is able to operate the Demat account properly. The compliance with law is necessary to avoid any penalty in future.