How to Open a Demat Account
SEBI has made it compulsory for trades in all listed scrips to be settled in demat mode. Although trades up to 500 shares can be settled in physical form, physical settlement is virtually not taking place due to the apprehension of bad delivery on account of mismatch of signatures, forgery of signatures, fake certificates, etc.
To open a demat account, you need to get in touch with a registered depository participant (DP). You can get a list of registered DPs from National Securities Depository Limited (NSDL) or Central Depository Services (I) Limited (CDSL) websites. Depository participants act as the intermediary between the central depository – NSDL or CDSL – and the investor. DPs can be banks, brokers or financial institutions that are empowered to offer demat services.
Download or collect an account-opening form from the registered DP’s office or website. It usually takes a week or two to open an account. You can also open a demat account with banks. Some banks offer the option of opening an account with any branch, while some others have a set of selected branches.
Once an account is opened, you can buy shares by visiting a broker either personally or online. This feature helps prevent problems such as loss, forgery or theft of the certificates, and makes the process of buying and selling securities much more efficient.
It is important to add a nominee while applying for
a demat account
You can open more than one account at the same name, with the same or a different depository participant (DP). However, you will need to fill the KYC form every time you open a new account.