What Demat Account does for you is it lets you shares and many other financial instruments digitally and in an organized manner. Just like how your bank account holds your precious money in a digital form and can be converted into real cash at your will, a demat account does something similar for the shares you buy in the stock market. Also, the Demat account can hold the government securities, mutual funds, shares & ETFs (exchange-traded funds). Without a Demat Account, it’s almost impossible to trade in the stock market. With everything being digitalized, the times of buying shares on paper certificates are almost gone.

How to open a Demat Account?

The process to open a Demat Account is fairly simple. Usually, it’s opened by a stock broker or a stock broking firm. The process involves the subsequent four steps:

1) Once you’ve decided the broking firm, you got to fill in the DP (depository participant) request form and submit it to the broker. The process can be done physically or you can do it online via an e-KYC mode of the online application.

2) Now, the second step is documentation. You have to give your DP application copy with your identity proof, address proof, colored photograph, the copy of canceled cheque, and a copy of your PAN card. If you choose the online medium for Demat Account, the details are fetched automatically from the database of your Aadhar.

3) Once that’s done, you need to get updated with your duties and rights of an investor. You also have to sign the form and then execute the final agreement. And, this the last task from your end.  

4) After filling up the form and finishing the procedures around it, along with DP authentication, the application is finally processed within 4-5 days. A unique ID will be assigned. While in case of online application or e-KYC, there is a requirement for the IPV (in-person verification) before your Demat Account is activated.

Top stock broking firms provide opening of Demat account without any processing fee in order to encourage people to invest in the stock market. Next time you find an offer to open free Demat Account, try to grab that opportunity and step into the world of investments and opportunities that come with it.