How to open demat account with just Aadhaar card

 

If you are thinking about investing in the stock market, you will first need a demat account. Such an account is mandatory if you wish to invest in equities. Apart from holding your assets in electronic (i.e. dematerialised) form, a demat account makes it easier to monitor the diverse securities in your portfolio. Wondering how to open demat account? It is easier than you think. All you need is your Aadhaar card.

How to open demat account

Not too long ago, you needed several types of documents to open a demat account. These were:

  • Identity proof (e.g. passport, driving licence, voter’s identity card, PAN card, Aadhaar card)
  • Address proof (e.g. passport, driving licence, voter’s identity card, PAN card, Aadhaar card, ration card, utility bill, bank passbook/statement)
  • Income proof (e.g. income tax returns, salary slips)
  • Cancelled bank cheque
  • PAN card

Then, in August 2019, finance minister Nirmala Sithamaran announced that you could open a demat account with just an Aadhaar card. However, this facility may not be available to non-resident Indians (NRIs).

Steps for opening demat account with Aadhaar card

The following five-step process is all it takes to open a demat account nowadays.

Step 1: Choose a depository participant (DP) with whom you would like to open a demat account. The DP must be linked with any depository registered with the Securities and Exchange Board of India (SEBI). Most financial institutes and brokerage services are registered DPs.

Step 2: Fill in the application form. You can access the form on the DP’s website. If you wish to use offline channels, collect the form at the DP’s office.

Step 3: Upload the application form along with a copy of your Aadhaar card, or submit the documents at the DP’s office. Ensure that the Aadhaar card contains your current and updated details.

Step 4: Following receipt of your documents, the DP will conduct an in-person verification.

Step 5: Once everything checks out, the DP will provide you with a demat account number and a client ID. You can now log in to access your new demat account.

Demat account opening charges

Factor in the costs before you open a demat account. These could also give you an idea of which DP might be a better fit for you. Some DPs provide a combined demat and trading account at an affordable charge.

  • Account opening fee: The amount tends to vary across DPs. In many cases, the fee changes depending on the segments in which you wish to trade. There may be an extra charge for opening the account via offline channels.
  • Annual maintenance charge: This fee is applicable once a year. It too may vary from one DP to another.

Summing up

A demat account can simplify your investment journey. It enables you to invest directly in the stock market and store securities in digital form. But there’s more. Corporate actions like dividends, refunds, and interest payments are credited directly to your account. Share splits, bonus issues, and rights issues happen through the account electronically. You could even apply for loans against your security holdings should the need arise.

Just make sure to work on choosing the right DP. If you open an account with a full-service broker like Kotak Securities, for instance, it would widen your reach. You would gain access to an extensive range of investment and trading opportunities.

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