What is the Eligibility to Open a Demat Account?

Last Updated: 25 Sep 2025

Investing in shares now happens almost entirely online, and that journey begins with a dematerialised, or “demat,” account. Before filling out any forms, an investor needs a clear view of the qualifying rules. This guide explains each rule, outlines required documents, and answers frequent queries, so that you can approach the process with confidence and clarity.

Who Can Open a Demat Account?

This is one of the most asked questions, and legally, there are several types of individuals and entities who are eligible to open a demat account. These are:

• Resident individuals acting in their own name
• Minors, represented by a natural or court-appointed guardian
• Non-Resident Indians and Persons of Indian Origin
• Domestic companies, limited liability partnerships, and partnership firms
• Hindu Undivided Families
• Registered societies, associations, and charitable or religious trusts

Each applicant type follows the same broad procedure through a depository participant, though the exact paperwork and approval timeline differ for residents, NRIs, and organisations.

Basic Eligibility Criteria for a Demat Account

Understanding demat account eligibility is the essential first step for any investor. The concept of the demat account age limit sometimes causes confusion. A minor can hold an account from birth, yet a guardian must manage all transactions until the majority. After turning eighteen, the individual submits fresh Know Your Customer (KYC) documents and operates the account without assistance.

The separate trading age limit refers to when a person may place buy or sell orders independently. For a resident citizen, that threshold aligns with the eighteenth birthday, provided the person has completed KYC. Another point is the age for demat account in the corporate context. Companies and trusts, having legal personality from their date of registration, meet this condition automatically once duly incorporated.

Finally, the minimum age to open demat account on a standalone basis is eighteen years for individuals who wish to transact without a guardian. Beyond age, all applicants must satisfy these universal requirements:

• Permanent Account Number issued by the Income Tax Department
• Completion of KYC, usually through Aadhaar-linked digital verification or an in-person meeting
• Valid identity proof: Aadhaar card, passport, voter identity card, or driving licence
• Recent address proof, such as a utility bill
• An active bank account in the applicant’s name for credit and debit of funds
• Passport-size photograph and clear specimen signature, either wet-ink or electronic

Meeting these criteria helps depository participants prevent fraud and maintain accurate investor records.

Documents Required to Open a Demat Account

The following checklist guides applicants in assembling the correct documents on the first attempt.

Resident Individuals

• Self-attested PAN card copy
• Aadhaar card or passport for identity proof
• Latest utility bill or bank statement (not older than three months) as address proof
• Cancelled cheque or recent bank passbook page showing IFSC and MICR codes
• One passport-size colour photograph

Non-Resident Indians and PIOs

• Copy of an Indian passport, or a PIO/OCI card with a foreign passport
• Overseas address proof, such as a residence permit, local utility bill, or foreign bank statement
• Indian address proof, if available
• PAN card issued by the Indian authorities
• FEMA declaration confirming adherence to foreign exchange rules
• Passport-size photograph
• Non-Resident External (NRE) or Non-Resident Ordinary (NRO) bank account details

Companies, LLPs, and Partnership Firms

• Certificate of incorporation or registration issued by the Registrar
• Memorandum and Articles of Association, partnership deed, or LLP agreement
• Board resolution or authorisation letter naming the authorised signatories
• List of directors or partners with their identity and address proofs
• PAN card of the entity and KYC records of authorised signatories
• Specimen signature and photograph of each authorised individual

Submitting clear, legible copies, physical or digitally signed, allows the depository participant to process the application promptly.

Who Cannot Open a Demat Account?

Regulations exclude certain applicants to protect the financial system:

• Persons unable to furnish a valid PAN, or whose PAN status is “inactive” or “deactivated”
• Individuals whose KYC returns a “failed” or “on hold” result due to document mismatch or data gaps
• Entities or persons debarred by the Securities and Exchange Board of India (SEBI) for insider trading, market manipulation, or similar offences
• Individuals found of unsound mind by a competent court, or undischarged insolvents
• Names present on domestic or international sanctions lists

A depository participant must refuse or freeze an account until such issues are fully resolved.

Special Cases

Joint Accounts

Two or more adults may hold securities jointly. Each holder completes KYC, yet the group may authorise any one holder to place trades and sign instructions. Ownership shares appear in the ratio declared on the application form.

Minor Accounts

The guardian opens and operates the account on the child’s behalf. On the eighteenth birthday, the holder submits a new KYC form, a fresh specimen signature, and bank details. All open positions and securities then shift to the holder’s independent control without additional fees.

NRI Accounts under FEMA

NRIs must follow the Foreign Exchange Management Act. They may open an NRE demat account when they want the full investment and its returns to be freely repatriated, or an NRO demat account when only part of the money can be moved abroad. Every trade passes through the Portfolio Investment Scheme or the Foreign Portfolio Investor route, chosen by the size and purpose of the investment. Dividend payouts and sale proceeds go straight to the linked NRE or NRO bank account, which automatically handles currency exchange and tax deduction.

Conclusion

Demat account rules keep the market open and safe. If you have your PAN, KYC papers, and bank details ready, you can open the account quickly. Minors, NRIs, and joint holders must follow a few extra steps. Knowing these steps helps you avoid delays and start a steady investment plan.

Frequently Asked Questions

1. Can a minor trade shares without a guardian?

No. A guardian must handle all trades until the minor turns 18. After completing the new KYC at 18, the individual controls the account.

2. Is Aadhaar mandatory for opening a demat account?

Aadhaar is the fastest way to verify identity, but a passport, voter card, or any other accepted ID can also work if the depository participant agrees.

3. What should I do if my KYC details change after the account is open?

Submit updated KYC forms and documents. The depository participant will verify them, so you can keep trading without disruption.

4. Can I open a Demat account for a minor?

Ans: Parents or guardians can open a Demat account for a minor in the name of a person who is below the age of 18 year

5. Can I open multiple Demat accounts with the same broker?

Ans: No, you can not open multiple Demat accounts with the same broker. You can open numerous Demat accounts with different stockbrokers.