The stock markets provide a good avenue for growing your wealth. This is especially true in a developing economy like India. But to transact in the equity markets, you will first need to open a demat account.
‘Demat’ is the short form for ‘dematerialised’. Such an account holds your securities digitally – in dematerialised form. Thus, it allows you to buy and sell securities online with ease. If you are wondering how to open demat account, the process is simple. All you need to do is check if you meet the eligibility criteria and gather the documents required for demat account opening.
Eligibility criteria for demat account
Two factors determine whether and how you can apply for a demat account. Here’s what you need to know
- Age – First things first, your age does not matter. Certainly, those above 18 years can open a demat account at any time. But even minors are free to apply for demat accounts.In case of minors, a parent or legal guardian can open the account and be in charge of it until the minor turns 18. Upon attaining majority, the account holder will have to submit some Know Your Customer [KYC] documents and open a fresh account.
- Documentation – To apply for a demat account, a valid PAN card is essential. In addition, you will need to furnish documents that prove your identity and address. Take a closer look at the documents required for demat account opening:
- Proof of identity – PAN card, voter’s identity card, passport, driver’s license, among others.
- Proof of address – PAN card, voter’s identity card, passport, driver’s license, ration card, utility bill, bank statement, among others.
If you can provide these documents, you are eligible to open a demat account.
How to open demat account
Start by approaching a depository participant [DP] that is registered with a depository. Two such depositories operate in India currently: Central Depository Services (India) Ltd [CSDL] and National Securities Depository Ltd [NSDL].
Now, fill in the account opening form and provide the necessary documents. Following an in-person verification, the DP will provide you with a demat account number and an identification number. A DP like Kotak Securities ensures a hassle-free experience and processes demat account applications in just a few days.