Friday, 30 December 2011

Opening a demat account – Know it how?

Are you planning to do share trading? Then it is essential for everyone to have a demat account. Like earlier days, there is no need for you to hold share certificates in physical form to prove that you own some shares in a particular company. In demat account; you will hold shares in e-form.

There are two depositories in our country namely, NDSL (National Securities Depository Limited) and CDSL (Central Depository Service Limited). To open a demat account you need to contact a DP (Depository Participant). These DPs are usually authorised by the above two depositories.  The DPs are usually the stock brokers or some banks.

You have to fill the form to open the demat account. Apart from this you need to submit a copy of PAN card, identity card, passport size photos bearing your signature and address proof. The main thing is you have to add your bank account to your demat account.

Ask for a copy from the DP regarding the rights and duties of that DP as well as you. It is your right and responsibility as well. You will be charged some fees for opening and operating a demat account. Of course, there will be a marginal difference in the amount so charged.

The charges are as follows:

Account opening charges
Yearly account maintenance charges
Custodian charges – (Mostly you need not  pay this as the company would have paid in advance some amount as custodian charges)
Brokerage charges – when you buy or sell

It is always advised to approach a broker and make yourself comfortable with the procedures and other related things before you kick off your share trading business.


  1. Thank you so much for sharing such a nice information on demat account.I am actually looking for the detailed information about demat account and your post give me all the details thank you so much.

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