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Free Demat Account Opening in India
by
Shreya Dixit
All the people already investing in the Indian stock markets are aware of demat accounts and their functioning. However, millions of people who are not yet familiar with the country s stock markets are still highly ignorant about concepts of dematerialized securities and dematerialized accounts. So for all those who are curious about what demat account really is, here is whatever you want to know about it in a nutshell.
What is meant by Demat?
DEMAT is a short and widely used form of the word dematerialized . Demat account, which is quite similar to a banking account and its functions, is used to keep all your financial assets and instruments like stocks, debentures, bonds and NSC in a dematerialized mode.
What are Depositories?
Depository refers to an agency responsible for holding dematerialized securities as well as facilitating the transfer of such securities electronically. In the Indian scenario, CDSL, short for Central Depositories Services Limited, and NSDL, an abbreviation for National Securities Depositories Limited, are two of the main agencies acting as the main or central Depositories. These depositories have appointed many brokers banks and financial companies. All those entities being appointed by CDSL and NSDL are referred to as Depository Participant (DP) and are responsible for looking after numerous depository activities including demat account opening & closure and various online trading transactions.
What is the procedure of demat account opening?
Demat account opening, in the present times, is an extremely simple procedure. Now you can easily open your demat account with any of the scheduled, nationalized, corporate or private banks, or with any of the financial institutions or brokers.
For opening demat account, fill you details in the demat account opening form and suffice it with few pre-requisite document, which includes Permanent Account Number (PAN) Card that is issued by Income Tax Department as well as residential and identification address.
Submit your recent passport-size photographs and a canceled cheque for the purpose of linking your bank account and your demat account.
You can submit a xerox copy of passport, driving license or voter identity card as your proof of identification.
As for your residential proof, you can provide Xerox copy of electricity, ration card, or any of your relevant utility bills of the latest date.
What After Demat Account Opening?
Once you have successfully opened your DP or demat account, you can dematerialize the securities you already possess in physical mode. That can be done by submitting a Demat Requisition Form to your Depository Participant. Suffice your Demat Requisition Form with the physical certificates of your securities after writing ‘Surrendered for Dematerialization’ across the certificate. After that, your DP process it. After about a fortnight, you can check whether the electronic form of your securities have been credited to your demat account or not.
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