loader2
Partner With Us

Who can open a Demat Account?

Introduction

Stock Markets are an investment haven for millions. The apparent reason for this is the exponential growth in it and the consequent abundant wealth creation opportunities that stocks offer. If you want to get aboard the share market wagon, too, you will need to open a Demat Account.

What is a Demat Account?

A Demat Account is a storage account that keeps your shares and securities in an electronic mode. In the earlier time, physical share certificates were used while trading in the stock market, but that is no longer in practice. In this new-age era, shares are sold and stored electronically. The concept of Demat Account was introduced to convert your physical share certificates into digital form. If you want to invest in the stock markets now, a Demat Account is mandatory. More so, the physical format came with risks like theft, forgery, loss, etc. And since a Demat Account is digital, it eliminates these risks.

Additional Read: Features and benefits of a Demat Account

How does a Demat Account work?

Your Demat Account is assigned a unique ID that helps companies to identify you correctly when they have to credit and debit shares from your account.

Demat, Trading and Bank Accounts are interlinked. The Trading Account transacts share trades using the funds from your Bank Account and shares from your Demat Account. Simply put, the shares you purchase through your Trading Account are credited into your Demat Account, and the funds to buy them are debited from your Bank Account. Similarly, when you sell shares, they are debited from your Demat Account, and the funds earned are credited to your Bank Account.

Additional Read: Is it possible to have two Demat Accounts?

Additional Read: Best Demat Account for beginners

Eligibility Criteria for opening a Demat Account

You can open a Demat Account only through a registered broker or brokerage firm. ICICI Direct is a registered broker that can quickly help you open a Demat Account online or offline. The process to open a Demat Account is similar to opening a Trading or Bank Account. Likewise, the eligibility criteria to open a Demat Account are also on the same lines as that of a Trading Account.

Age

Anyone can have a Demat Account – minors as well as adults.

If you are a minor, your natural or appointed guardian can open the Demat Account for you. However, in this case, you cannot have any charge over this account till your turn 18 years old. Your natural or appointed guardians will function on your behalf.

PAN Card

A valid PAN Card is mandatory.

Trading Account

You need a functional Trading Account to buy and sell shares from your Demat Account. However, you can have a Demat Account without a Trading Account if you only hold the shares or securities and not sell them. Even in the case of an IPO, you need a Demat Account to store the shares. A Trading Account is not necessary here.

Bank Account Proof

You need a functional Bank Account for opening a Demat Account. Submitting either one of these will serve as bank proof - A Cancelled cheque, Bank Passbook, latest 6-month Bank Statement.

Income Proof

You need income proof if you want to invest in Futures and Options. Submit any one of these to prove your income – the latest 6-month Bank Statement, 3-month salary slip, ITR statement.

Address Proof

You can submit any of these as address proof - PAN card, Aadhaar Card, Driving License, Passport, Voter ID Card, up to 3-month old utility bill or bank statement.

Miscellaneous

You need your passport photo and your PAN card matching signature on white paper to complete the documentation.

Additional Read: Can a student open a Demat Account?

Conclusion

The process to open your Demat Account in a hassle-free and quick manner requires your documentation handy. Once your documents are in order, choose the best broker in terms of service quality and price to make your stint in shares a happy one.

Disclaimer : ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.  The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  Investments in securities market are subject to market risks, read all the related documents carefully before investing. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.

Most Popular

f
  • 15 Sep 2021
  • ICICI Securities

5 Most Popular Reasons for Switching Bank

In the beginning, you would hear from them quite often. But of late, you're noticing more and more signs that it's no longer working. We are referring to your relationship with your bank. Click here to read how to recognize the red flags in your banking relationship and why it might be a good time to end the bond.

  • 15 Sep 2021
  • ICICI Securities

How Intraday Trading Works? Detailed Ideas

Intraday trading in India has been gaining momentum of late. It is no longer the option of only trade pundits.

  • 15 Sep 2021
  • ICICI Securities

What is Intraday trading? A Beginner's Guide

With the advancement of technology and increased knowledge about the stock market, trading is no more a domain dominated by stock pundits.

  • 05 Sep 2021
  • ICICI Securities

Is it Good To Invest in Cyclical Stocks?

Akin to how the pedals of a cycle go up and down as it moves forward, the share price of certain stocks goes up and down in accordance with the economic cycles a country goes through. 

  • 05 Sep 2021
  • ICICI Securities

A primer on Fixed Maturity Plans

If you happen to have some surplus funds which you don’t need for a specific period, but you don’t want to take the risk of investing this money in the stock market, you can very well put this money in a Fixed Maturity Plan or FMP. 

  • 05 Sep 2021
  • ICICI Securities

How to Choose the Best Equity Mutual Fund

You must have heard a lot about investing in mutual funds. But before jumping on this trend you need to assess a mutual fund scheme according to your goals, investment horizon, risk profile, liquidity needs and many other factors to find a suitable match. 

  • 05 Sep 2021
  • ICICI Securities

A Beginner’s Guide to Monetary Policy Tools

The Reserve Bank of India has the incredibly crucial responsibility to formulate the monetary policy. The main objective of monetary policy is to control inflation and provide a conducive environment for the country's economic growth. 

  • 05 Sep 2021
  • ICICI Securities

Buying Penny Stocks and its Risks

There is a specific category of stocks whose prices are very low and they seem to yield exponential returns. But do you know that investment in such stocks could be risky? 

  • 05 Sep 2021
  • ICICI Securities

How to Choose the Best Debt Mutual Fund?

Debt mutual funds primarily invest in fixed income securities, which include money market instruments like commercial papers, corporate bonds, treasury bills, government bonds and other instruments.

  • 05 Sep 2021
  • ICICI Securities

Tax Saving Using Section 80D

“Make your life safe and get insurance immediately”. This statement was never more relevant than the times when the pandemic threatens to wipe off the population. 

Open an Account

Sign Up for Free

+91

Please use the mobile no registered with Aadhaar.

OTP sent to +91 1234567890

Didn’t received OTP? Resend

00:30

iciciDirect-money-logo
iciciDirectMoney-App

Get Research Backed Recommendations.

Download The app now

or Scan below QR Code To download app

QRcode