Demat Account Opening FAQ

Last contribution by jahnavi on 27 Mar 2022

NSDL or the National Securities Depository Limited is India's oldest and most renowned provider of demat account services. NSDL also provides a wide range of services related to shares to its customers. Any Demat account opened with the NSDL is termed an NSDL Demat account.

Updated on : 2022-03-27 07:47:29

jahnavi

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Can I operate a joint account on "either or survivor" basis just like a bank account?

No. As per rules applicable at present, demat account cannot be operated on 'either or... Read More

No. As per rules applicable at present, demat account cannot be operated on 'either or survivor' basis like the bank account. Therefore, every instruction given for a jointly held demat account needs to be signed by all the joint holders.

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Can I transfer all my securities to my account with another DP and close my demat account with one DP?

Yes. In case you have multiple demat accounts with one or more DPs and do... Read More

Yes. In case you have multiple demat accounts with one or more DPs and do not wish to continue with them, you may submit account closure form to your DP(s) in prescribed format. In the form, you are required to mention DP ID, DP name and Client ID of the account where you wish the balances to be transferred. Your DP will transfer all your securities as per your instruction and close your demat account. It is important to understand that a demat account cannot be closed if there is any balance in the account.

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What can I do with my NSDL demat account?

There are numerous uses of your NSDL demat account. Few important things that you can... Read More

There are numerous uses of your NSDL demat account. Few important things that you can do with your NSDL demat account are listed below –

You may apply for IPOs and NFOs. Do not forget to mention your DP ID and Client ID correctly in the application form. Same demat account can be used to purchase and hold shares and other types of securities.

You will automatically receive all corporate benefits (bonus, rights issue, etc.) in your demat account. Cash benefits like dividend declared by your company, interest or maturity amount payable on your bond investments etc. would be credited to bank account linked with your demat account. Please ensure correct bank account details are recorded in your demat account.

You may use your demat account to avail 'loan against shares' facility which is offered by many banks etc. to meet your financial requirements without requiring to sell the investments.

You may convert all your investments in shares, bonds, debentures, government securities, sovereign gold bonds etc. held in paper form to demat form through your DP.

You may hold your mutual fund investments in the same demat account. Holding mutual fund units in demat account makes things a lot easier for you. You would be able to monitor your portfolio at one place through NSDL CAS. It also saves you from the need to engage with various mutual fund houses if you want to make any change in your personal information, for example, address or bank details or nominee, etc. You may subscribe to mutual fund units in demat form by simply mentioning your DP ID and Client ID in application form. Investment in mutual funds by way of SIP is also possible through your demat account. For redemption or repurchase of mutual fund units, you may give an instruction to your DP or may use NSDL's SPEED-e facility.

You may participate in buyback offer by tendering your shares to company through your demat account.

You may participate in securities lending and borrowing scheme by lending securities lying idle in your demat account and may earn market returns.

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How can I shift or transfer my demat account from one DP to another DP?

For shifting or transfer of a demat account, you need to first open a new... Read More

For shifting or transfer of a demat account, you need to first open a new demat account where you want the balances to be transferred to (if you already have another demat account, then you may use it for this purpose, instead of opening a new account). Then you need to submit duly filled and signed ‘Account Closure Form’ to your existing DP. In the form, you should mention the details of the other demat account where you want the balances to be transferred. After verification of your request, your DP will arrange to transfer the balances to the desired account and then close the source account.

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How to Open a NSDL demat account?

Opening a demat account is quite simple. All you have to do is to approach... Read More

Opening a demat account is quite simple. All you have to do is to approach a NSDL DP, which will help you to complete the formalities. You need to fill up a form, submit PAN card and proof of address. In addition, you need to provide details of your bank account. Alternatively, you can click on https://nsdl.co.in/Open_NSDL_Demat_Account.php to open your demat account.

After your demat account is opened, your DP will provide you DP ID and Client ID, a copy of your Client Master Report containing your demat account related details, tariff sheet and ‘Rights & Obligations of Beneficial Owner and Depository Participant’. DP ID is 8 characters long code, (example IN3XXXXX) allotted by NSDL to all DPs to identify them. Client ID is 8 digit long code used to identify the clients in the system. Combination of DP ID and Client ID makes your unique account number in the NSDL system.

You should verify the Client Master Report to ensure that all your details have been recorded correctly in depository system. If you want to trade in shares etc. (i.e. buy or sell), you would also need to open a Trading / Broking account with any SEBI registered stockbroker. There are many DPs which offer 3-in-1 arrangement for the benefit of investors (3-in-1 is a combination of demat account, trading account and bank account).

Now a days many NSDL DPs enable their clients to open demat account online, thus making the process paperless and extremely convenient.

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How do I select a DP?

You can select your DP to open a demat account just like you select a... Read More

You can select your DP to open a demat account just like you select a bank for opening a savings account. Some of the important factors for selection of a DP can be:

  • Convenience - Proximity to your office/residence, business hours.
  • Comfort - Reputation of the DP, past association with the organization, whether the DP is in a position to give the specific service you may need?
  • Cost/ level of service - The service charges levied by DP and the service standards.

For list of DP locations, visit https://nsdl.co.in/dpsch.php and for their comparative charge structure, visit https://nsdl.co.in/about/charges.php

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What should I do if I want to open a demat account?

Once you have decided to open an account with a particular DP, you may approach... Read More

Once you have decided to open an account with a particular DP, you may approach that DP and fill up an account opening form. You would be required to provide your photograph and self-attested copy of following documents -

Please remember to take original documents to the DP for verification. In case you are unable to produce original document for verification, then photocopy should be attested by any authorized entity, like a public notary. Your DP may ask additional proof of identity / address to meet its requirements in addition to above-mentioned. The process of account opening is shown in the diagram below -

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What is in-person verification?

It is mandatory to establish the identity of the applicant at the time of opening... Read More

It is mandatory to establish the identity of the applicant at the time of opening account as per SEBI guidelines. This is done by the DP’s staff by verifying the affixed photograph on account opening form and the photo seen on document on PAN card with the person seeking to open the account. For Joint account holders, the ’in-person verification’ is required for all the holders.

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Can I open more than one demat account?

Yes. You can open more than one account with the same DP. There is no... Read More

Yes. You can open more than one account with the same DP. There is no restriction on the number of accounts you can open with a DP.

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Do I have to keep any minimum balance of securities in my demat account?

No. The depository has not prescribed any minimum balance. You can have zero balance in... Read More

No. The depository has not prescribed any minimum balance. You can have zero balance in your demat account.

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Why should I give my bank account details at the time of account opening?

Providing bank account details at the time of demat account opening is mandatory. These bank... Read More

Providing bank account details at the time of demat account opening is mandatory. These bank details are communicated to issuer companies / RTAs for the purpose of crediting any amount payable to you (such as dividend, interest or maturity payment or redemption amount) directly in your bank account. It is therefore suggested that you provide details of your active bank account in the account opening form. Later, in case of change therein, please remember to inform to your DP.

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What is 'Standing Instruction' given in the account opening form?

In demat account, debit or credit transactions are permitted only if it is duly authorized... Read More

In demat account, debit or credit transactions are permitted only if it is duly authorized by the respective holder(s). As a Delivery Instruction Slip (DIS) is required for every debit transfer in the demat account, a 'Receipt Instruction Slip' is required for every credit transfer in the demat account. By giving a onetime standing instruction to your DP, you may avoid giving receipt instruction to your DP whenever a credit is expected in the account.

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