Documents required for a demat account

The “demat” in a demat account is short for dematerialized. It’s the securities equivalent of your bank account, holding your financial instruments like bonds, shares, mutual funds, government securities and exchange traded funds (ETFs). It’s called so because it holds all of them in a dematerialized or electronic format. You as an investor (or a shareholder) have advantage of holding shares in electronic form rather than physical form.

Key Points:

  1. You need to provide some documents in order to kickstart your demat account opening process. These include PAN Card, address proof and bank proof. A properly filled out account opening form can go a long way in ensuring that your demat account is opened quickly.
  2. If your phone number is linked to your Aadhaar Card then you can open a demat account online–completely paperless.

Introduction to demat accounts

A demat account is opened when you register with a broker. You cannot trade in the equity market without a demat account.

A demat account is therefore a necessity. In order to hold these financial instruments, the entire world has moved to the electronic form of storage. Paper certificates of ownership, or any other documents, are hardly issued.

You do need some personal documents to open a demat account though. Again, these don’t necessarily have to be paper documents – electronic forms work. We discussed the process of opening a demat accountin a previous article. Now, let’s get you up-to-speed with the documents you will need.

Documents Required for Demat Accounts

Account Opening Form

The very first document you’ll be dealing with is the account opening form. You’ll need:

  • A properly filled demat account opening form
  • Your photographs, attested with signatures across them, in both the forms.

Proofs of Identity

PAN Card: Since you’re going to be trading in financial assets, a PAN card is a mandatory requirement when opening a demat account.
Additional ID Proof:

In addition to the PAN card, you also need to submit any one of the following ID proofs:

  • Driving Licence
  • Passport
  • UID (Aadhaar)
  • Voter Identity Card
  • NREGA Job Card,/li>
  • PAN Card
  • Any document notified by the central government

Proof of Address

Lastly, you’ll need to submit a proof of address in India. There can be some overlap of address proof and ID proof documents.The full list includes:

  • Driving Licence
  • Passport
  • UID (Aadhaar)
  • Voter Identity Card
  • NREGA Job Card
  • Utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid
    mobile phone, piped gas, water bill).
  • Bank account or Post Office savings bank account statement.
  • Documents issued by Government departments of foreign jurisdictions and letter issued by Foreign Embassy or Mission in India.

Proof of Bank

You’ll have to show proof of the bank account that you wish to connect with your demat account. If you have a canceled cheque that has your name on it then you can send it to your broker along with the account opening forms. Or, if you’re opting for the online account opening process you can upload the cancelled cheque with the bank’s IFSC code to the online portal. In a bank proof a broker needs the following from you:

  • Your name
  • Bank’s IFSC Code
  • MICR

Some brokers allow you to submit your bank statement which has your name,MICR and bank’s IFSC code or the front page of your passbook as long as it has all the above details clearly visible.

Procedure For Opening A Demat Account

Armed with these documents, you’re only one step away from opening a demat account. Choose your broker after having compared them based on factors such as customer service, demat account charges, and user experience.

Depending on the format you’re storing these documents in (paper or electronic), you can choose between 2 paths on completing this process.

Paper Forms

  • Download and print the demat account opening form, and fill in the necessary details.
  • Submit the account opening forms alongwith the required documents specified by your broker. Your broker might ask for an updated KYC form if it is not already updated. Proof of identity and proof of address are one of the most important proofs that you need to submit.
  • The account opening form will also ask you to mention a nominee. Nominee is the person who will be in-charge of your account and its assets if some kind of mishap were to happen to you.
  • You’ll also come across the Depository Participant-Investor agreement, which contains details such as the charges you’ll incur while holding the demat account, the rules and regulations, terms and conditions, and also the duties of the broker and your rights as an investor.
  • An in-person verification to check that your details are true and valid may be completed.
  • After all the formalities are completed, you’ll receive a Beneficiary Owner Identity (BOID) or Unique Client Code (UCC) – a unique account number which will be used in all future transactions you conduct.

Electronic Demat Registration (eKYC)

As you can see the paper registration process can be cumbersome and stretch over multiple days. Thanks to the internet and our increasingly integrated systems, it’s a lot easier to open a demat account now. Follow our demat account opening procedure to better understand the entire flow of account opening.

– If you have soft copies of all your required documents and the Aadhaar Letter as Proof of Address for Know Your Client (KYC), you can register your demat account online. Simply feed in basic details – such as the email ID and mobile number you’d like to use. In order to receive the OTP, make sure the given mobile number is linked to your Aadhaar Card.
– The next screen should ask you your PAN number for validation.
– After this screen, we come to the most important feature of the account opening process–validation via Aadhaar details. Enter your Aadhaar (UID) number, and Upstox will perform all the remaining data validation for you – such as full name, address, age, gender or all the other details will be prefilled.
– Once you upload all your documents,your demat account registration should be complete. Good luck trading!

Wrapping Up

  • You can choose from a variety of options as Proof of Address and Proof of ID as well.
  • With some brokers you can upload the scanned copies of your documents on their account opening portal directly.
  • Others offer the option of submitting physical documents via courier as well.
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