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A Demat account is similar to a bank account, except it stores securities and other financial instruments in electronic format. The procedure to open a Demat account online is almost the same across different firms and institutions.
You have to select a depository participant (DP) which can be banks, financial institutions, and brokers authorized by the SEBI to open a Demat account online.
After choosing a trusted DP, you must go through all the terms and conditions to understand the documents required for the Demat account opening process.
Eligibility to open a Demat account:
- A person can only open a Demat account when they are above 18 years of age
- One can also open a minor Demat account for their child, but the parent or guardian must supervise the account until the minor turns 18.
- Even if you are an NRI (non-resident Indians) you can open an online Demat account in India.
The following categories of non-individuals are also eligible to open a Demat account online:
- Corporate entities
- Partnership organizations with the Demat account in the partner’s name
- Registered or unregistered trusts, the Demat account being in the trustees’ name
- Registered or unregistered societies with Demat account in the name of members
- An association of persons (AOP)
- Limited liability partnership (LLP)
Documents required for Demat account opening are:
- Proof of identity (POI)
- Proof of address (POA)
- Proof of income
- PAN card
- Copies of recent passport size photographs
Below is the detailed list of documents required for Demat account opening
List of documents qualifying for proof of identity (POI):
- PAN card with a credible photograph of the applicant. PAN card is mandatory for all applicants except for those specifically exempt from obtaining PAN
- Unique identification number (UID) for example- Aadhar/ passport/ voter ID/ driving license
- Ration card that contains your photograph
- Identity card or document with the applicant’s photo, issued by the following bodies:
- Central or state government
- Statutory or regulatory authorities
- Public sector undertakings (PSUs)
- Scheduled commercial banks
- Public financial institutions
- University-affiliated college credit or debit card member IDs issued by the professionals like ICAI, ICSI, ICWAI, or the bar council
List of documents qualifying for the proof of address:
Documents required as address proof for Demat account opening are:
- Applicant’s passport
- Voter’s ID
- Ration card
- Any registered sale or lease agreement of your current residence
- Driver’s license
- Utility bills such as electricity bills or telephone bills containing your address that are not over 3 months old
- An insurance copy
- A copy of your bank statement or passbook which is not over 3 months old
- Government or statutory authority document
- Proof of address issued by: Bank Managers of commercial banks, co-operative banks, multinational foreign banks, gazetted officer, a notary public or legislative assembly or the parliament represent
- Any document or identity card issued by: Central or state government and its department statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, university-affiliated colleges, professional bodies like the ICAI, the ICSI, the ICWAI or the bar council.
- Address Proof in the name of the spouse is accepted
List of documents qualifying for proof of income:
- A copy of the income tax return (ITR), as submitted to the income tax department
- A net worth certificate by a chartered accountant
- Salary proof Demat account securities statement with other DP
- A copy of the current bank account statement stating the history of the past six months’ income
List of people authorized to attest the documents:
- Notary public, manager of a scheduled commercial bank or multinational foreign banks (name, designation, and seal should be affixed on the attested copy)
- With NRIs
- A judge
- Court magistrate
- Authorized officials of overseas scheduled commercial banks registered in India
- An Indian embassy or the consulate general in the country where the client lives
After having all these documents ready, you can open a Demat account online and start your trading journey.