You need a demat account to hold your shares and securities in the electronic format. And opening an online demat account is a fairly straightforward process. To begin with, you need to select a depository participant (DP). DPs can be banks, financial institutions, brokers, or any other entities authorized by SEBI to act as an intermediary between you, the investor, and the depository.
Before you begin the process of opening a demat account, you’ll need to look up the depository participant’s terms and regulations to understand the documents needed to get your account activated. Knowing the list of documents needed for an online demat account beforehand can help you be prepared for the account opening process. This, in turn, will help you get done with the application process quicker. Furthermore, having your documents in place can also make the approval process faster from DP’s end.
In order to open a demat account with a depository participant, you need to first ensure that you’re eligible for the same. The following categories of individuals can open a demat account in India.
In the case of minors, the account is to be operated by a guardian or a parent till the minor attains 18 years of age.
Non-individuals in the following categories are also eligible to open a demat account with a depository participant.
In addition to this, banks and mutual funds can also open a demat account. Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI) can open trading accounts.
While the exact set of documentation requirements may vary from one depository participant to the next, there are generally three classes of documents that every DP needs you to provide in order to see the demat account opening process through. These are three primary types of documents required.
Any document that is registered with the government and that has your photograph on it is admissible as proof of your identity. Typically, these are some options that can act as an identity proof.
To fit into this category, your documents need to contain your address. Any of these documents can be admitted as proof of address for the purpose of opening your demat account.
In case you’re a judge at the high court or the supreme court, a self-declaration giving your new address is an admissible proof if you’re opening a demat account for yourself. Additionally, any proof of address in the name of your spouse may also be accepted.
Another set of documents required for demat account opening deals with providing proof of your income. Some examples of papers that are admissible as proof of your income are listed here.
Your PAN card is a mandatory proof required for demat account opening. In addition to the documents mentioned above, you will also be required to submit these papers.
IIFL offers you the facility to open a demat account for a minor. The minor is required to be the sole holder of the account, meaning that no joint holders or nominees can be appointed. Furthermore, the account of the minor can only be operated by the parent or guardian concerned.
In case you’re planning to open an online demat account in the name of your minor child, you’ll need to produce the relevant documents to proceed with this undertaking. Here’s what we require.
Only the minor’s father or mother can be considered as a guardian. In case the guardian’s relationship with the minor is not parental, then the said guardian should have been appointed by a court order.
You may also need to get some of your documents attested in order to successfully complete the demat account opening procedure. In case this is necessary, here’s a list of people who are authorized to attest your proofs.
To attest your documents, the person qualified to do so should affix the following details on the copy of the relevant document.
If you’re a non-resident Indian looking to open a demat account with a depository participant based in India, like India Infoline, you have the option to choose from any one of two types, namely non-resident external (NRE) or non-resident ordinary (NRO).
The documents you’ll need to produce are listed here.
If your bank proofs do not mention the category of the account (whether NRE or NRO), a verification letter is required from your bank, mentioning this detail. Also, all the copies of your KYC documents should be attested by any entity qualified to do so.
Now that you have a detailed guide to get all your documents ready, you can be adequately prepared to supplement your demat account opening form with the necessary papers. Having your documents in order makes it easier for the depository participant to process your application quickly, so your demat account is opened faster and smoothly, without any hassle. This way, you get to begin trading in the financial markets sooner than later. It also gives your trading experience a neat start, devoid of any roadblocks.