A Demat account is like a bank to store various securities in dematerialized form. Mentioned below are some of the securities —
- Shares
- Bonds
- Mutual Funds
- Government Securities
- Exchange-Traded Funds (ETFs)
You can store securities in your Demat account without going through any paper process. National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CSDL) are the two Indian central depositories who manage securities in Demat accounts in India. They follow the rules & guidelines by the Securities and Exchange Board of India (SEBI) and ensure the security for all Demat accounts. You can open a Demat account in any of the two central depositories with the help of a Depository Participant (DP). Along with a Demat account, some DPs help you open a Trading account too.
There are three types of Demat accounts. These are —
- Regular Demat Account
These regular Demat accounts are for investors and traders who reside in India. Those people who trade in equity shares alone must use this type of account. They help store shares in a hassle-free manner.
- Repatriable Demat Account:
This is a special type of Demat account for Non-Resident Indians (NRIs). You need to link this NRI Demat account with an NRE bank account. You can transfer funds abroad through this account.
- Non-Repatriable Demat Account
This is also a special type of Demat account for Non-Resident Indians (NRIs). You need to link this NRI Demat account with an NRO bank account. You can not transfer funds abroad through this account.
Here is a simple process you have to follow to open a free Demat account.
- Choose a Central Securities Depository (DP)
You need to decide on whether you want to open a Demat account in CDSL or NDSL through a Depository Participant. There’s no major difference between both depositories and they both provide the same benefits. It’s a matter of personal preference.
- Choose a Depository Participant
IIFL Securities is among the leading stock brokerage firms in India which helps you to open a free Demat account and a Trading account. They are a full-service stockbroker who provides complete information regarding the Stock Market, helping you learn how to trade and achieve financial freedom.
- Complete the Form
After choosing the DP, you can either visit their office or download the online form and fill it up. You will have to provide the basic details such as name, address, phone number, email ID, etc.
- Complete KYC
You will have to be a KYC-complaint. After submitting the form, you will have to complete your KYC. Along with letting you open a Demat account online, they will help you complete eKYC from the luxury of your home.
After completing all the above formalities, you can open a Demat account. You will receive a welcoming email from the central depository with your Beneficiary Owner ID (BOID) which is a unique number for your Demat account. You can use this BOID to check the holdings in your Demat account at any time.
