Demat or Dematerialized account is to store stocks in electronics form. It is just like opening a bank account to store your money. Now nobody is interested to keep shares in physical forms and going for electronic based filing of shares. This has changed the style of operation in main Indian stock markets like BSE Sensex ( Bombay Stock Exchange Sensitive Index) and Nifty (National Stock Exchange of India) and its brokers.

Depository


Depository is responsible for keeping stocks of investors in electronics form. There are two depositories in India, NSDL (National Securities Depository Ltd) and CDSL (Central Depository Services Ltd).

Depository Participants

DPs are agents who connect depository with Investors. It is like a bank branch with which you can open a demat account to buy or sell shares.

How to Open a Demat Account


It is like opening a bank account. You have to approach a depository participants to open an online trading or demat account. Most of the banks are DPs too.

Documents Required

You will have to submit few documents with the application form to open a demat account. As per latest Govt of India rule PAN (Personal Account Number) card is must for opening a demat account. These are the documents required to open a demat account

1. Photo Copy of PAN Card (Mandatory)

2. Two Passport size photos

3. Address Proof : Ration Card/Passport/Driving License/Voter's ID Card/BSNL Telephone/LIC Policy

4. Latest Bank Statement and photocopy of Bank Passbook

You have to fill up and submit the demat account opening form with these documents and will have to pay a small account opening fee.

Your Demat Account

After submitting the application your demat account will become after few days. Once it is active you can start buying and selling shares.

Charges and Fees

There will be an annual account maintenance fee and a transaction fee for your demat account and it will vary between DPs. Contact your depository participants branch or refer their documents.