Demat and Trading Accounts

Does Demat account provide the same interest rate as the savings account?

No. Demat account is for holding Dematerialized securities (Shares, Unit of Mutual funds etc). It does not have any savings in it. Hence the question of Interest does not arise.

What are the charges applicable in a Demat account?

How do I transfer from one Demat account to another Demat account?

Transfer of securities from one account to another account can be affected through off-market transactions (i.e. without routing through the broker or stock exchanges) by furnishing the depository participants identity number and the client identity no. The duly filled in slip is to be submitted to the concerned DP with whom you have the Demat account. The transfer is affected by NSDL after receiving the executed document forwarded by the DP on behalf of the Client. Charges are applicable and the transferor will have to disclose the market value of the shares intended to be transferred in a separate form which is to be annexed along with the off-market transfer slip.

What are the maintenance charges for a Demat account? Are there any hidden charges or processing fees on the transactions I do on Demat account?

Maintenance charges are also known as folio maintenance charges, and are generally levied in advance. The transaction fee is charged for crediting/debiting securities to and from the account on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, Some DPs charge only for debiting the securities while others charge for both.

Do I have to pay yearly maintenance charges even if I do not hold any shares in my Demat account?

Yes but it differs from broker to broker. Some brokers have annual maintenance and some don't.

Can a person have more than one Demat account on his name?

Yes, a person can have more than one Demat account on his name. There is no restriction on number of Demat accounts which an investor can open. An investor can open more than one account in the same name with the same DP and also with different DPs. For all the accounts, investor has to strictly comply with KYC norms including Proof of Identity, Proof of Address requirements as stipulated by SEBI and also provide PAN number. The investor has to show the original PAN card at the time of opening of Demat account.

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

No. The depository does not prescribe any minimum balance. You can have zero balance in your account.

Is it mandatory to have a Demat account to apply in an IPO?

Yes it's mandatory to have a Demat account to apply in an IPO. IPO Allocated shares are transferred to investors through Demat account. If you don't provide correct Demat account information, your IPO bidding application will not consider for share allotment. Always double check that you provided correct DP ID and Client ID details in the bid/application forms before submitting the form.

What is the procedure for opening a Demat Account?

What exactly is dematerialisation?

Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited in the investor's account with his Depository Participant [DP]. In order to dematerialise his certificates, an investor first has to open an account with a Depository Participant. He then has to request for the dematerialisation of his certificates by filling up a dematerialisation request form [DRF], which is available with his DP.

Can a Demat account opened for a minor?

Yes Demat account can be opened in the name of a minor. The account will be operated by a guardian till the minor becomes major, Guardian has to be the father or in his absence mother. In absence of both, father or mother, the guardian can be appointed by court.

Can someone else operate my account on my behalf on the basis of a power of attorney?

Yes. If you authorise any person to operate your account by executing a power of attorney and submit it to your DP, that person can operate the account on your behalf.

Can I hold other securities in same demat account?

Yes you can have same demat account for the purpose of holding other securities such as government securities, mutual funds etc.