Common questions on demat accounts
Here is that you need know about demat accounts.
Are there any fees involved?
- No. Upstox doesn’t have any demat account opening fees.
- How can I convert my physical shares into demat form?
- Once you have opened a demat account, you can then fill up the Demat Request Form (DRF) and submit along with the original share certificate. For every share with a different ISIN or International Securities Identification Number, you will have to fill up a different form. Once the DP verifies your form and the certificate, the stocks will be credited to your demat account.
- Can you transfer shares to another demat account?
- Yes, you can. You will need to fill in a form called the Delivery Instruction Slip. This mentions your details as well as that of the recipient. This includes: the name of the share, the quantity, the name and ID of the recipient’s depository participant and demat account number. In case, the two demat accounts belong to different depositories – CDSL and NDSL, then you will have to fill in an Inter-Depository Slip.
- Is there a minimum number of shares to be held?
No. Your demat account need not always have shares and other securities. There is no minimum requirement. That said, irrespective of whether your demat account is active or not, you will have to pay annual maintenance charges.
- Can you nominate your demat account?
Yes. When you fill your demat account opening form, you can mention the name and details of your nominee. The account and the shares will automatically pass on to them in case of your demise.
- Can you get physical copies?
Yes, absolutely. This is called rematerialization. You can request for physical copies. However, this won’t be free of cost. The depository will charge a small amount.
- What documents are needed to open a demat account?
You will need to submit two documents – one as proof of identity and another for your address. This could include all government-approved documents like PAN card, Passport, Voter’s ID, Driver’s license, Ration Card, IT returns, other ID cards issued by central and state governments and departments as well as those issued by professional bodies like ICAI, ICSI, Bar Council, ICWAI and government-affiliated institutions. Apart from these, you can also submit verified or attested copies of electricity and phone bills, bank statements, and housing and rent agreements. If you are a student, you can also give a copy of your college ID card.
- Is it necessary to have the demat account with the same Depository Participant (DP) as the broker?
Not at all. You can link demat accounts from any DP and depository in India with a trading account. There is no such limitation.
- Can you open multiple accounts?
Yes. Whether it is the same DP or different DPs, you can open as many demat accounts as you want. However, for all your accounts, you will have to pass through the verification process and submit proofs of identity and address. Also, you will have to pay charges for all the accounts.
- Why you should get a demat account today
Investors who have been trading since the 90s or earlier may still hold share certificates in physical form. It is about time you get these dematerialised – the process of converting physical forms of shares into electronic format. There are many benefits to the demat account.Here are some.
- No need to worry about preservation of the share certificates, the fading away of the ink, tearing, theft and other risks. In the electronic format, none of these worries arise.
- Ease of delivery of shares from one account to another. Think of it this way — how long it used to take earlier when you had to pay money through a cheque in comparison with an inter-bank online transfer. Exactly the same way, it used to take a week or more to deliver shares physically. In contrast, the entire procedure of order settlement and delivery now takes just two days.
- What if you got the postal address wrong? Or what if the courier or postman delivering your shares misplaced them? Then you wouldn’t get your share certificates on time. Such cases of bad delivery never arise in the demat format.
- Not only does it save time, but also lowers your transaction costs. Companies too can communicate more easily with you. You do not have to register your ownership details with the company every time you buy a share. Dematerialisations makes it easier for you to receive dividends and bonus shares.
- The entire process of trading becomes faster.
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