Imagine being a young adult with limited financial leverage, dreaming of building your safety net and path to financial independence. What could be your golden goose?
Undoubtedly, the stock market. This is the reality for countless aspiring retail investors. Establishing your first foothold in the market all starts with an online Demat account opening process.
If you’re in a similar situation as the person we prompted you to imagine earlier but need more clarity– this guide is exactly what you need to get started with Demat accounts.
What are Demat accounts?
Demat accounts can be thought of as a virtual book that registers all the assets you own in the stock market. It’s a mandatory tool, alongside a trading account, for anyone interested in investing in the Indian stock market.
How to Open a Demat Account?
Opening a Demat account in India is fairly straightforward and is usually done via a Demat account app. Below is a general overview of the process that many platforms follow.
1. Providing identification and address proof:
Identity verification is mandatory, as per regulations, to prevent fraud. Most apps require you to upload the original scanned copies of your PAN Card and documents that can provide address verification, such as an Aadhar card, driving license, passport, electricity bill, or any government-issued document. However, the exact list of accepted documents may vary between Demat account platforms.
2. Proof of Bank Account:
Most apps require you to prove the ownership of a bank account. To do so, you’d likely be required to upload scanned copies of a canceled cheque leaf with signature, stamped bank passbook, or latest bank statement.
3. KYC or equivalent:
A KYC process would be carried out to prove that the person opening the Demat account is exactly the same as the person whose documents have been uploaded. Different apps have different ways to do this. Some may offer eKYC services through a short video call with the platform’s representative, live photo, or biometric verification, while others may require an in-person KYC.
4. Account setup:
Basic security information, like the app PIN, passcode, etc., would be required to activate the account. This is an additional layer that would prevent unauthorized access to your trading app in case your device is lost.
Typically, all documents uploaded for identification would be verified by the respective platform’s internal team. The exact turnaround time for the verification may vary by platform, but it typically ranges from 3 to 5 business days.
Some advice!
1. Read the terms carefully before signing up.
2. Ensure that the scanned copies of documents meet the standards set by different platforms, such as having a clear picture and the entire document in frame.
3. Keep the instant Demat account login credentials safe
4. Some apps may also offer paid-tier plans that unlock advanced features. Ensure to check the pricing and terms before going ahead with any plan.
The Bottom Line
While the Demat account opening process might seem document-heavy, it’s designed to protect your investments and create a secure trading environment for all investors. Keeping your documents handy is all you need for a smooth start to trading.