Ever wonder how to ditch a piggy bank mindset and up your financial game beyond just saving? Your savings account is a safe house for your cash, earning some interest. But, let’s be honest, it won’t make your money work for you. A demat account, on the other hand, is like a launch pad for your money. It allows you to hold all investments, such as stocks,  mutual funds, and ETFs, which can generate much higher returns than your savings account.

This blog has the complete details regarding crucial documents required to open a demat account

What is a Demat Account?

A demat (dematerialised) account holds your securities like shares, bonds, mutual funds, ETFs (Exchange Traded Funds), and government securities in the digital format. It is similar to a digital wallet holding your cash. With a demat account, there is no need to maintain any paperwork related to your securities. 

If you choose to trade your securities online with a trading account, all the operations involving the buying and selling of shares are handled digitally. 

You can open a demat account with a depository participant (DP). DP can be a bank, broker, financial institution, or SEBI-authorised entity. With a demat account, you can track and manage securities digitally. It enables share trading and online investment management. 

Eligibility to Open a Demat Account 

If you are an Indian over 18 years of age, you can open a demat account. However, the Demat account must be linked to an active bank account. Minors can open a demat account, but the account can only be operated by the parent or guardian until the minor turns 18. NRIs, too, can open a demat account with their NRE or NRO bank account to invest in the Indian stock market. 

Apart from individuals, the following entities can also open a demat account:

  • Corporate entities
  • Partnership firms
  • Registered/unregistered societies
  • Registered/unregistered trusts
  • Limited Liability Partnership (LLP)
  • Association of Persons (AOP)

Documents Required to Open Demat Account

You need four types of proof to open a demat account – ID proof, address proof, bank account and income proof. 

Address ProofProof of IdentityIncome ProofBank Account Proof
Aadhaar cardAadhaar cardRecent salary slipsLatest bank account statement with account name and account number
Voter identity cardPAN cardBank account statement for the last six months, including income detailsSigned and cancelled personalised cheque leaf
PassportVoter identity cardForm 16
Driving licencePassportIncome tax return acknowledgement
Utility bill (electricity, telephone, mobile post-paid, pied gas, water) not older than two monthsDriving licenceAudited annual accounts issued by a Chartered Accountant (CA)
Post office savings or bank account statementAny central government documentNet worth certificate issued by CA
Any government document

Steps to Open a Demat Account

Opening a demat account can be done in two ways – online and offline.

Online Demat Account Opening

The online method of demat account opening is streamlined and hassle-free. It only takes less than 5 minutes to open your demat account. It is as simple as any signup form. 

Follow these steps to open a demat account with Share.Market:

Step 1:  Download Share.Market app or go to share.market 

Step 2: Find the button Open Demat Account and click on it.

Step 3: Authenticate your mobile phone with the OTP. 

Step 4:  Fill out the online demat application form with accurate personal information like name, phone number, email address, Aadhaar card, PAN card, and bank details. 

Step 5: Share.Market will automatically connect to your Digilocker account for identity and address verification. 

Step 6: Share.Market will also automatically validate your bank account by depositing Rs 1 in your account.

Step 7: Complete the E-KYC process.

Step 8: Take a selfie to authenticate your demat account.

Step 9: Complete sign verification. This usually involves e-signing using Aadhaar authentication. 

Step 10: Click on submit. It may take 2-3 days to activate your demat account, after which you can trade securities. 

Conclusion 

Holding your money in your savings account earns very minimal returns. Learn to multiply your income through trading and investing if you want to build wealth. For that purpose, open a demat account. Traders and investors can effortlessly buy, sell, and hold securities with a digital demat account. Keeping all your shares, bonds, mutual funds, and ETFs under a single account will make managing it easier. 

Open your demat account seamlessly with Share.Market to get started in your investment journey. Explore stocks, mutual funds, WealthBaskets and more to start investing like a pro.