Dematerialised Account or Demat Accounts
Dematerialised account or Dmat Account is a type of banking account which dematerializes paper-based physical stock shares. The dematerialised account is used to avoid holding physical shares: the shares are bought and sold through a stock broker. The Dmat account is very popular in India. For trading above 500 shares on should have Demat account necessarily as by the Securities and Exchange Board of India (SEBI). A person holding a demat account should also be a PAN Card holder.
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The extent of documentation required to open a demat account may vary according to your relationship with the institution. If you plan to open a demat account with a bank, a savings, current and, or other account for which the holder have been issued a check book, such holder has an edge over the non-account holder. In fact, banks usually offer additional incentives to customers who open a demat account with them.
When opening an account with a bank, you need a minimum balance. Not so with a demat account. A demat account can be opened with no balance of shares. And there is no minimum balance to be maintained either. You can have a zero balance in your account. When you open an account, the DP will allot a unique BO ID (Beneficial Owner Identification) Number, which you need to quote for all future transactions.
If you want to sell your shares, you need to place an order with your broker and give a 'Delivery Instruction' to your DP. The DP will debit your account with the number of shares sold. You will receive the payment from your broker. If you want to buy shares, inform your broker about your Depository Account Number, so that the shares bought are credited into your account.
Documents required :-
Along with the application form, your photographs (with co-applicants) and proof of identity/ residence/ date of birth have to be submitted. The DPs also ask for a DP-client agreement to be executed on non-judicial stamp paper. Here is a broad list:
- A canceled check, preferably MICR
- Proof of Identification
- Proof of Address
- Proof of Pan card (mandatory)
- Recent photographs, one and, or more
For proof of identification and, or address self-attested facsimile copies of PAN card, Voter’s ID, Passport, Ration card, Driver’s license, Photo credit card, Employee ID card, Bank attestation, latest IT returns and, or latest Electricity/Landline phone bill are sufficient. While they only ask for photocopies of the documents, they will need the originals for verification.
Banks offering Demat Accounts in India are :-
ICICI Bank - www.icicibank.com
Citibank Demat Account - www.online.citibank.co.in
HSBC Bank India - www.hsbc.co.in
IDBI Demat Account - www.idbi.com
HDFC Bank Demat Account - www.hdfcbank.com
NriDemat.com - www.nridemat.com
ING Demat Account - www.ingvysyabank.com
SBI Demat Online Trading - demat.sbi.co.in
Demat Account from Standard Chartered - www.standardchartered.co.in
Open a Demat Account - www.sharekhan.com