Financial Awareness Level
How to Open a Demat Account in India: Step-by-Step Guide for New Investors
Introduction
A Demat account is essential for investing in shares, ETFs, mutual funds, and other securities in electronic form. Whether you're a beginner or planning to start stock market investing, knowing the Demat account opening process is the first step. This guide explains how to open a Demat account, online and offline, along with its benefits, eligibility, and key documents required.
What Is a Demat Account?
A Demat (Dematerialised) account holds your securities such as stocks, bonds, ETFs, and mutual fund schemes in digital format. It eliminates the need for physical share certificates and enables seamless online trading and investing.
Benefits of Opening a Demat Account
- Secure & Paperless: Stores investments digitally, avoiding risk of loss or damage
- Convenient Transactions: Easy buying/selling of shares via trading platforms
- Lower Costs: No stamp duty or handling fees on digital securities
- Access to Investments: Monitor all holdings in one place
- Faster Settlements: Trades are settled within T+1 or T+2 days (may vary with type of investment)
(You are recommended to seek advice from financial advisor before you take any/refrain from any action)
How to Open a Demat Account Online – Step-by-Step
1. Choose a Depository Participant (DP)
- Select a SEBI-registered broker or financial
2. Visit the Website or App
- Go to the DP's official platform and click on “Open Demat Account”
3. Fill the Application Form
- Provide your full name, mobile number, email, PAN, Aadhaar, and bank details
4. Upload Documents
- PAN Card
- Aadhaar Card or other address proof
- Bank proof (cancelled cheque or bank statement)
- Signature (on white paper)
5. Complete e-KYC and In-Person Verification (IPV)
- Most platforms offer video-based IPV where you show your original documents
6. Sign Using Aadhaar OTP
- Use Aadhaar-linked mobile number to complete e-signing via OTP authentication
7. Account Activation
- Once verified, your Demat account details (login credentials) will be emailed to you within 24–48 hours
(Please note that it may vary as per brokers requirements, thereby you are recommended to seek advice from financial advisor before you take any/refrain from any action)
Documents Required but not limited to Open a Demat Account
- PAN Card (mandatory)
- Aadhaar Card (for e-KYC)
- Passport-size photograph
- Bank account proof (cancelled cheque or passbook copy)
- Signature on white paper
(Please note that it may vary as per brokers requirements, thereby you are recommended to seek advice from financial advisor before you take any/refrain from any action)
Offline Procedure to Open a Demat Account
- Visit a DP’s physical office or branch
- Fill up the Demat account opening form manually
- Submit photocopies of required documents and passport-size photo
- Complete in-person verification with original documents
- Sign the agreement and receive a Client ID upon approval
Eligibility to Open a Demat Account
- Must be an Indian resident or NRI (with necessary permissions)
- Must have a PAN card and a valid address proof
- Individuals, joint holders, minors (through guardian), and corporate entities are eligible
(Please note that it may vary as per brokers requirements, thereby you are recommended to seek advice from financial advisor before you take any/refrain from any action)
Charges to Open a Demat Account
- Account Opening Fees: Many DPs offer zero account opening charges
- Annual Maintenance Charges (AMC): ₹300–₹600 (may be waived for the first year)
- Transaction Charges: Vary based on buy/sell activities
(Please note that it may vary as per brokers requirements, thereby you are recommended to seek advice from financial advisor before you take any/refrain from any action)
The option of investing in mutual fund schemes has been made even more accessible with the introduction of 3-in-1 accounts that provide the functions of Demat, savings, and trading account. However, opening a Demat account is also relatively easy and hassle-free.
You may also invest through an Demat + Trading Account
- You must log on to Demat+Trading Account
- You then select the mutual fund house from the list of fund houses
- Pick the mutual fund scheme based on your investment objectives and risk tolerance and click on Invest now
- You must select the amount you plan to invest in the mutual fund scheme and the mode as either One Time or Monthly SIP.
(Please note that it may vary as per brokers requirements, thereby you are recommended to seek advice from financial advisor before you take any/refrain from any action)
One can also buy mutual funds units through NSE – MFSS and BSE - StAR MF just like a company stock. To avail this facility, one must complete a one-time online registration with NSE or BSE, as the case may be. For more information on NSE – MFSS and BSE - StAR MF, please visit www.nseindia.com/ www.bseindia.com
Conclusion
Opening a Demat account online is a simple, quick process that unlocks access to India's growing capital markets. Whether you choose an online platform or an offline method, ensure that your DP is SEBI-registered and offers a user-friendly interface with transparent charges. With your Demat account in place, you're ready to explore equity, ETF, and mutual fund scheme investments confidently.
(Please note that it may vary as per brokers requirements, thereby you are recommended to seek advice from financial advisor before you take any/refrain from any action)
Additional links:
What is a Mutual Fund? - Beginner's Guide to Investing
AMFI - Introduction to Mutual Funds
Securities and Exchange Board of India
FAQ Section
What is the minimum amount to open a Demat account?
There’s no minimum investment requirement. You can open an account with zero balance.
Can I open more than one Demat account?
Yes, you can open multiple Demat accounts with different DPs, but each must be linked to your PAN.
Is it compulsory to open a trading account with a Demat account?
While not compulsory, it's recommended. A trading account is needed to buy/sell shares.
Can NRIs open a Demat account in India?
Yes, through NRE/NRO accounts and with RBI-compliant DPs.
How long does it take to open a Demat account online?
Typically 24–48 hours, provided all documents and verification are in order.
What are the charges for maintaining a Demat account?
Annual maintenance fees (AMC) range from ₹300–₹600 depending on the DP.
Can minors open a Demat account?
Yes, through a guardian (parent/legal guardian) with the required documentation.
Is Aadhaar mandatory to open a Demat account?
For e-KYC and online verification, Aadhaar is the preferred ID.
Can I open a Demat account without PAN?
No, PAN is mandatory as per SEBI regulations.
How do I know if my Demat account is active?
You’ll receive login credentials from your DP and can check status by logging into your account or contacting customer support.
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An Investor Education And Awareness Initiative
Visit https://www.hdfcfund.com/information/key-know-how to know more about the process to complete a one-time Know Your Customer (KYC) requirement to invest in Mutual Funds. Investors should only deal with registered Mutual Funds, details of which can be verified on the SEBI website (www.sebi.gov.in/intermediaries.html). For any queries, complaints & grievance redressal, investors may reach out to the AMCs and / or Investor Relations Officers. Additionally, investors may also lodge complaints directly with the AMCs. If they are not satisfied with the resolutions given by AMCs, they may raise complaint through the SCORES portal on https://scores.sebi.gov.in/scores-home/. SCORES portal facilitates investors to lodge complaint online with SEBI and subsequently view its status. In case the investor is not satisfied with the resolution of the complaints raised directly with the AMCs or through the SCORES portal, they may file any complaint on the Smart ODR on https://smartodr.in/login.
The information is for general purposes only and not an investment advice. Readers should seek professional advice before taking any investment related decisions.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY
