Demat accounts are essential for trading in India. No one wants to indulge in offline trading and experience hassles. For the same reason, investors are leveraging the power of Demat and trading accounts in India. Some new investors are worried about the account opening charges levied by the broker or depository participant. Luckily, there are several options to open a Demat account free of cost.
Read this article to understand how to open a Demat account for free in India.
Significance of Demat Accounts
A Demat account is converting physical securities into electronic format for convenience. Let us say you buy stocks from NSE (National Stock Exchange). Without a Demat account, you will get a physical trade certificate from the stock exchange. On the other hand, if you have a demat account, the purchased stocks would be digitised and transferred to your Demat account.
A Demat account works closely with a trading account. As discussed above, a Demat account can only digitally hold the purchased securities. You will still need trading account to buy and sell capital market securities.
Both these accounts work together on a trading platform in India. A trading platform can be a web-based portal or application to browse, research, and invest in securities.
Opening a Demat Account for Free
To open a Demat account for free, you must search for a depository participant or stockbroker in India. However, choosing a stockbroker as a Demat account provider is better. Since stockbrokers offer Demat and trading account services, you will get everything in one place.
- Visit the official website of the broker or depository participant and find the Demat account option.
- Start your Demat account application by providing details like name, mobile number, and email address. The Demat account provider will send a confirmation OTP to your mail address or contact number.
- After verifying your mobile number or email address, provide other details to the Demat account provider.
- You must enter personal details, including occupation, PAN card number, etc.
- When all details are entered, it is time to submit KYC. These are mandatory documents to be uploaded on the official website at the time of account opening.
- You must upload your PAN card, Aadhaar card, cancelled cheque, or other documents asked by the Demat account provider.
- Some Demat account providers indulge in the e-KYC process. The verification will happen over a video call with the e-KYC process. However, some Demat account providers might call for a physical meeting for verification.
- Once verification is completed, wait for the service provider’s response. You will receive your Demat account credentials via mail or SMS upon approval. You are now eligible for online trading in India.
Besides applying for Demat and trading accounts, also choose an investment platform to help you with investment research and decision-making. Many trading platforms offer educational resources for new investors. For instance, new investors can learn what is Forex trading or intraday trading with a trading platform.
Many brokers offer Demat accounts for free in India. However, investors must pay the account provider the maintenance charge once a year. New investors must compare the account charges of different providers before choosing one in India. Open a Demat account for free today!