How to Open Demat Account Online: Step-by-Step Guide

Are you thinking about investing in stocks but unsure how to proceed? The first step to investing in the stock market is to open a demat account. Opening a demat account is as simple as making any digital transaction these days. You can open a demat account within minutes from your mobile screen by following a few simple steps.. 

Explore this blog to learn how to open a demat account for individuals, corporates, HUFs, and NRIs. We’ll also cover the required documents and eligibility criteria. So let’s get started!

Who Can Open Demat Account?

Anyone can open a demat account in India including Resident Indians, Non-Resident Indians, minors, HUFs, and institutions. Over the years the demat account opening process has been made easy and convenient by SEBI, making demat accounts accessible to various categories of investors. 

Let us see the eligibility criteria to open a Demat account in different categories: 

Individual:

• Resident Individual: Any Indian citizen residing in India and above the age of 18 can open a Demat account.

• NRIs: An NRI (Non-Resident Indian) is an Indian citizen who resides outside India for employment, education, business, or any other purpose that indicates an indefinite stay abroad. 

  NRIs can open two types of demat accounts: NRO Demat Account, for investments using income earned in India (non-repatriable), and NRE Demat Account, for investments using foreign income (fully repatriable).

• Minors: A minor is a person who is below the age of 18 and is under the supervision of parents or a legal guardian. Parents or legal guardians can open a demat account on behalf of a minor and the account will be operated by a guardian till the minor becomes major.

HUF:

A Hindu Undivided Family (HUF) can open a demat account to invest in shares, mutual funds, bonds, and other securities. The demat account is opened in the name of the HUF, with the Karta (head of the family) operating the account on behalf of all members. The HUF’s investments and taxation are accounted as separate from its members.

Corporate or Non-Individual:

Non-individual entities such as Domestic companies, trusts, and institutions can open demat accounts to manage their funds and invest in listed stocks, bonds, and other securities. The account is opened in the name of the entity, and authorized signatories (like directors, partners, and trustees) operate the account. 

Steps to Open Demat Account Online

Here are the seven steps to open a Demat account online for Indian residents:

Step 1: Download the App or Visit the Website

Download the Rupeezy app from the App Store for Mobile or you can click on this link to open demat account through the official Rupeezy website.

Step 2: Fill in Personal Details

In this step, you need to enter your personal information, including name, address, PAN number, and contact details.

Step 3: Upload Documents

Upload necessary documents like Aadhar card, PAN card, and bank statements for KYC verification.

Step 4: eSign the Form 

After uploading the necessary documents, complete the process by electronically signing the application form.

Step 5: Verification

Rupeezy’s team will verify your details, and upon successful verification, your Demat/Trading account will be activated. 

After account activation, you will receive an email that includes your login credentials, Client Code, and other details.

Step 6: Set the Password

After receiving the client code, open the app and set your password to secure your data and activities.

Step 7: Start Trading 

Once your account is active, deposit money into your wallet, and you're all set to start trading or investing through the broker’s platform.

How to Open Demat Account for NRI

NRIs cannot invest through regular demat accounts, instead they have to open a special Demat and trading account designated for NRIs under RBI guidelines. Also, a domestic demat and trading account cannot be converted to a Non-Resident demat account.

Here are the four simple steps to open an NRI demat account:

Step 1: Obtain a PIS (Portfolio Investment Scheme) Letter

 First, NRIs need to obtain a PIS (Portfolio Investment Scheme) Letter, basically a permission letter from RBI that is issued by Authorised Dealer Banks on behalf of RBI. 

Step 2: Open NRE and NRO Accounts 

After the PIS permission letter is issued, NRI has to open an NRE/NRO - PSI SB Account and NRE/NRO SB Account in the same bank that issued the PIS. Additionally, these accounts are only meant for investment-related transactions and no other activities.  

Step 3: Complete the Demat Account Form 

After the PIS letter and Bank Accounts are opened, they need to fill out a physical demat account opening form by visiting the broker.

Step 4: Submit Required Documents

Along with the demat opening form, NRIs need to submit all the required documents offline to the broker's office. 

How to Open Minor Demat Account

To open a Demat account for minors, the steps remain the same as above. However, all the necessary documents must be submitted offline. If you're still unsure, you can explore our minor demat account blog, where we have detailed the step-by-step process to open it

How to Open HUF Demat Account

The Demat account opening process for HUFs is entirely offline, requiring filling out the Demat account opening form and submission of all necessary documents to the broker’s office. To open a HUF demat account, Karta must submit the application form along with the required documents. Once the documents are verified, the account is activated, and the account details are provided.

How to Open Corporate Demat Account (Non-Individual)

Non-individual entities such as companies, partnerships, LLPs, and trusts, can open demat accounts by filling out the Demat account opening form and submitting all the necessary documents and some additional documents. The account is opened in the name of the entity, and authorized signatories (like directors, partners, or trustees) operate the account.

Documents Required for Demat Account

Here’s the list of documents required to open a demat account online and offline for individuals, minors, NRIs, HUFs, and non-individuals.

For Individuals

• PAN Card

• Aadhar

• ITR copy/acknowledgment

• Form 16 or Salary slip

• Six months bank statement

For Minors

• PAN Cards: For both the minor and the guardian.

• Identity Proofs: Aadhar cards or other valid IDs for both parties.

• Birth Certificate: To verify the minor's age.

• Bank Account Details: Information for the guardian’s bank account.

For NRIs

• Valid Passport

• Valid Visa (showing the purpose of stay e.g. work, business, residence, studies)

• PIS Permission Letter

• PIO/OCI Card

• PAN Card

• Document of overseas Residence Address

• India Address 

• Photograph

• Bank Account Proof

For HUF

• PAN card of HUF entity, KARTA, and all the coparceners

• HUF Bank account details

• Address proof of HUF entity & KARTA and all the coparceners, 

• Declaration of Karta & Coparceners (with signatures).

For Corporate (Non-individuals)

• Entity's PAN

• Address proof of the entity

• Incorporation certificate

• Board resolution or authorization letter 

• KYC documents for authorized signatories

• MOA ( Memorandum of Asspciation 

• Audited annual accounts

• Net worth certificate

• Partnership Deed (for Partnership firms)

• Trust Deed (for Trusts)

• LLP Agreement (for LLPs)

• HUF Declaration (for HUFs)

Where to Open Demat Account

Demat accounts can be opened with SEBI registered Depository Participant (DP), which acts as intermediaries between investors and depositories. A depository is an organization that holds investor’s securities in electronic form and facilitates their transfer.

There are two SEBI-registered depositories in India: NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).

A Depository Participant is the interface between the depository and the investor. Banks, financial institutions, stock brokers, NBFCs, custodians, etc. can be Depository Participants by registering with either CDSL or NSDL, provided they are eligible under the SEBI Regulations 2018.

You can find the best demat account for you by keeping the following points in mind:

• Reputation: Research the reputation and standing of the DP, how long they have been in the market, client base, customer feedback, etc. 

• Convenience: Many new-age platforms offer paperless online account openings within a few minutes. 

• Demat Charges: Check and compare charges such as demat account opening charges, annual maintenance charges, transaction charges, custodian fees, etc.

• Other Features: Check out the features offered by the platform such as investment products (stocks, mutual funds, bonds, ETFs, Gold/Silver, Derivatives, Commodities, etc), advanced charts, and trading tools.

• Trading Costs: Look into brokerage charges of the platform where you want to open a Demat account as different platforms have varied charges for buying and selling different categories of products. 

Rupeezy is one such broker that has been in the industry for over two decades, offering a range of stock brokering services. These services include delivery, intraday trading, futures and options (F&O), IPO subscriptions, and mutual funds. The platform features a user-friendly interface and maintains customer-friendly costs, which include no charges for account opening and 0 account maintenance charges.

Charges for Opening a Demat Account

Demat account opening charges depend on the broker. Some platforms offer it for free, while others charge a nominal fee. However, on Rupeezy, you can open a Demat account free of cost with a seamless online process.

Benefits of Opening a Demat Account with Rupeezy

• Zero Account Opening Fee: Open a demat and trading account with Rupeezy free of any charges. Lesser fees add to your profits.

• Instant Online Account Opening: There is no need to fill out physical forms or sign papers. You can open a demat and trading account instantly with a few clicks online.

• MTF at 0.03% Per Day: Avail MTF at an attractive interest rate of 0.03% per day on over 1000 stocks. If you spot an opportunity in the market but are short on cash, you can place a small margin and Rupeezy offers up to 5 times the money in equity delivery at an attractive interest rate for 365 days.

• Trade with Zero Cash: Even if you don't have cash readily available you can simply pledge the shareholdings in your demat account as collateral to buy shares of other companies. 

• Advanced Features: Rupeezy provides you with various advanced trading features for free and you can even trade directly from the charts, utilize Options Chain & Greeks, and free Options Strategy Builder. 

  Assess profit and loss for all trades with PayOff Graph. Place quick multiple trades with Basket Order, and automate trades with GTT-OCO Orders. 

• One platform, many products: Invest in stocks, IPOs, mutual funds, commodities, derivatives, and bonds, all from a single platform.

• Trusted Name: Rupeezy is a trusted name with a legacy of 20 years and a community of 1.5 lakh+ active customers. Some of the significant milestones that Rupeezy has achieved:

- Star Performer in the (Highest Growth Rate) award by NSDL in the year 2019

- Torchbearer of Commodity Derivatives market in 2019 by MCX

- Recognised as the Star Performer in “Account opening” in 2019 by MCX

Common Mistakes to Avoid While Opening a Demat Account

While demat accounts have made life easy for investors, with zero physical documents, and easy account opening and upkeep, this can also lead to issues if you are not vigilant. Let’s see how:

1. Incorrect Documentation: While many platforms enable online account opening, it is important to provide proper documents such as a clear photograph, correct information, and all the required documents to ensure timely verification and account opening without any delays.

2. Not Checking Platform Credibility: In the age of sophisticated cyber frauds, scammers often entice investors through social media with offers from spurious or duplicate websites that mimic popular trading platforms. It is advisable to research investing platforms and check reviews and credibility before opening an account. 

3. Charges Fine Print: Before opening a demat account, you should go through all the charges associated with a demat account, such as the account opening charge, Annual Maintenance Charge, demat transaction charges, Depository Participant fee, etc. A Demat account holds your investment for a long time. These small charges can accumulate to a sizeable amount over the years and eat into your profits.

4. No Nomination: SEBI requires individuals to record nominations for their demat accounts. Without a nominee, your family may face legal complications and lengthy procedures to claim your securities, potentially leading to unclaimed assets or disputes.

Conclusion

A Demat account is the first step to starting your investing journey. The Demat account opening process is simple and instant. However, it is important to keep documentation in order, compare charges and features, and research customer support and feedback while selecting a platform for demat.

FAQs

Q1. Can I open demat account for a minor?

Yes, you can open a demat account for a minor under the guardianship of parents or appointed guardians.

Q2. Can I open multiple Demat accounts?

Yes, you can open multiple demat accounts with different brokers with a valid PAN number.

Q3. Can an NRI open demat account?

Yes, NRIs are allowed to open a demat account with permission from RBI. NRIs can open a demat account on a repatriable and non-repatriable basis.

Q4. What is the minimum age to open demat account?

Any resident individual above 18 years of age can open a demat account. Minors can also open a demat account under the guardianship of parents or appointed guardians.

Q5. How can I open demat account without a PAN card?

You cannot open a demat account without a valid PAN card.