Demat Accounts Demystified: Your Gateway to Hassle-Free Investing and Financial Freedom
This article aims to guide new investors through the process of opening a Demat account online, a critical step for investing in equity shares.
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One account. Many options.
Open a Demat and Trading account
- Zero commission* on Mutual Funds and IPO
- ₹20* per order on Equity, F&O, Commodity and Currency
- By signing up you agree to receive transaction updates on Whatsapp. You may also receive a call from an Upstox representative to help you with the account opening process.
Quick Onboarding
- Secure onboarding process. Set up a Demat account with just PAN, Aadhaar and eKYC.
Easy Accessibility
- Login with biometrics or mobile number and buy/sell stocks from our web, Android or iOS platforms in one click.
Smooth Orders
- With just a toggle switch, switch between intraday or delivery orders. Enjoy GTT and AMO on Stocks and F&O orders.
Informed Decisions
- Search stocks easily using smart lists and smart filters. Get latest news, analyse charts and find in-depth company information to make informed decisions.
What is a Demat account?
Demat account is an acronym for Dematerialized accounts.
As you need to have a bank account to deposit your money and earn interest, in the same way, you need to open a Demat account to buy or sell financial securities such as stocks and Equity Traded Funds(ETFs). Demat account is necessary to hold securities electronically.
When you buy stocks or shares, they will get credited to your account. When you sell the stocks or shares you have purchased, they will get debited from your account.
By opening the Demat account, you do not need to transfer your share certificates physically to the buyer. You need to link your bank account with your Demat account, through which you can easily buy and sell shares. It does not only save your time, but it also reduces the transaction cost.
It is now mandatory to have a Demat Account to buy or sell securities that are listed on the exchanges, such as stocks of companies. However, you don’t need a Demat Account to invest in mutual funds, insurance schemes and other traditional saving options.
While opening up a Demat account, you will have to bear some charges to maintain your account, such as Demat account opening charges, safety charges or custodian fees, annual maintenance charges, transaction charges, etc.
You can easily open an Upstox Demat account online without any Demat account opening charges or account maintenance charges.
The Demat account is more than just a depository for investors' securities. It is a move to bring transparency and regulation to the securities markets.
The National Stock Market of India was the country's first completely automated stock exchange that made the Demat account India mandatory. It officially opened in 1994, and share trading in Demat form began in 1996. Currently, a Demat account in India is compulsory to invest and trade in equities and other asset classes. As a result, there is no need to keep physical share certificates anymore.
How to open a Demat account?
Opening a Demat account online is easy, and you can do it with just a few clicks. You will need your Aadhaar card linked with your mobile number and other details to open the Demat account.
Four simple steps to open a Demat account online:
Step 1. Go to Upstox's online Demat account registration page
Step 2. Click ‘Sign Up’ after entering your basic information
Step 3. Keep scanned copies of your documents:
- Aadhaar, PAN, Cancelled Cheque, and your most recent bank statement) on hand so that you can easily upload it whenever required.
Step 4. To verify your identity:
- Enter your Aadhaar details and the OTP you receive on your registered mobile number.
You can use your Demat account after it is opened after verification. You will receive the details of your Demat account on the registered email address.
Documents Required to open Demat account
To begin the process of creating a Demat account, you will need some documents. PAN Card, address proof, and bank proof are three broad categories of the type of documents required to open a Demat account online. Providing these documents is a standard Demat account opening process for various brokerage houses. A correctly completed account opening form can help ensure your account is opened as quickly as possible.
Proof Of Identity
- PAN Card
- Aadhaar
- Driving Licence
- Passport
- Voter Identity Card
- NREGA Job Card
- Any other accepted document advised by the central government
Proof of address
Although some of the address proof may be the same as the identification proof, here is the complete list of the documents that can act as proof of address:
- Aadhaar
- Passport
- Voter’s Card
- Driving Licence
- NREGA Job Card
- Utility bill such as electricity bill, water bill, postpaid mobile that is not more than two months
- Bank account or Post Office savings bank account statement.
- Documents issued by Government departments of foreign jurisdictions and letter issued by Foreign Embassy or Mission in India.
Proof of bank
You'll need to verify the bank account you want to link to your account. To create a Demat account online, you may submit the cancelled cheque together with the bank's IFSC number to the company website.
Here are the proof of bank account details that you may have to share:
- Your name
- Bank’s IFSC Code
- MICR
- PDF of online bank statement with your name, MICR and bank’s IFSC code or the passbook.
Why Open a Demat account with Upstox?
Upstox provides a broad range of facilities that make opening a Demat account with Upstox a wise choice.
Here are the benefits of opening an online Demat account with Upstox:
Quick account opening process
Documents can be uploaded in an electronic format, and verification is done digitally by Upstox. The Demat account is ready for use within two hours.
Track the market movements for your investments in real-time
By opening your Demat account with Upstox, you can track the market volatility live and in real-time. You don't have to use another software to track the profits and losses of your portfolio.
Upstox is stable and quick to use
The Upstox platform is easy to use because it is technology-friendly software. It is stable because it won't hang as other applications do. Upstox believes in continuous innovation and improvement in technology, making it user-friendly.
Hold all your investments in one place.
You can hold all your investments, including mutual funds, in a single Upstox application. You can manage your funds efficiently and monitor all your stocks in one place. You can immediately buy and sell your investment in a few minutes.
Various investing options
You have various online trading options, including stocks, IPOs, mutual funds and futures, and options that you can avail through your Demat account.
IPO
Investors who want to invest in new companies can apply for shares before the company issues them in the markets. The period in which sales of a company's shares are allowed to the general public is called an Initial Public Offering or IPO. Demat accounts are useful for buying shares in IPOs.
Stocks
In addition to buying stocks from the primary market i.e., during the IPO, you can also buy and sell stocks after the stocks are listed on the exchange, i.e. the secondary market. The secondary market is where stocks are bought and sold by traders. It is important to understand that when you buy a company's stock from another shareholder, you acquire shares that give you a certain degree of ownership in the company and the right to participate in the decision-making process during a board of directors' meetings.
Mutual Funds
You can invest in mutual funds as the fund manager give you the benefit of a portfolio of investments to diversify the risks associated with the financial instruments. Investing in markets is subject to risks related to micro or macroeconomic factors. Investing in different asset classes helps you diversify the risk and maximize your profits.
Futures and Options
In addition to trading stocks, investors have the option of trading futures and options, which refers to derivatives whose values depend on the underlying financial assets. Investors trade according to their predictions as the market moves.
Transparent and pocket-friendly pricing.
Get more from your money by opening a Demat account with Upstox.
Account opening:
There are no charges to open an online Upstox Demat account.
Account maintenance charges:
While some brokerages may charge an annual account maintenance charge, there are no annual account maintenance charges. So, that means that you can open a free Demat account with Upstox.
Commission:
There is zero commission when you invest in mutual funds or IPOs.
Brokerage charges:
Upstox Demat account charges a flat brokerage fee of Rs. 20 on equity, F&O, commodity and currency orders.
Benefits and information about Demat Account
- The advantage of having a Dematerialized Account is eliminating the risk associated with paper-based share certificates. Before the invention of Dematerialized Accounts, shares were transferred physically, creating risks such as theft, loss, tampering, and forgery.
- Bonus stocks or stock splits get automatically updated in your Demat accounts. Earlier, investors have to update it physically through the broker's office.
- Demat accounts are not limited to shares or a single class of assets, but one can use them to invest and trade in a number of investment options such as mutual funds, ETFs, currency trading, futures and options.
- You buy and sell your investment through your mobile phone just in a few minutes. Accessibility is available through the Demat account, anytime, anywhere. In the case of physical premises, you need to visit the branch office only.
- A Demat account provides you with the facility of nomination. In the case of the owner's demise, all the investment with returns will be transferred to the nominee.
- You can conveniently store an unlimited number of investments safely in electronic form with a brokerage firm. The brokerage firm's mobile application tracks your investment without Demat account login. You can reset your password by properly verifying your identity with the brokerage firm via phone.