A share does not land in your savings account. It lands in a demat account. For the definition of demat account, read on. It is a dematerialised account that holds shares, bonds and fund units in electronic form.
Many open one that same week, as the shares have to go somewhere. The form seems long, but the papers are ready, and you can fill the form in one go.
What must you keep readily available?
Do not start filling the form and hunt for the papers. People abandon the application midway through for this reason. Have these ready with you
- PAN card
- Aadhaar with the mobile number
- Cancelled cheque or recent bank statement
- A clear picture along with your signature, on a white sheet
The bank account has to be in your name. Joint accounts tend to add to the processing time as it requires one further round of verification.
How to Open Demat Account Online?
As you search how to open demat account, you likely intend to avoid the branch. Most brokers follow the same 4 steps to open an account online.
Step 1: Fill your details on the sign-up form
Input your name, email ID, mobile number and PAN. Ensure all letters on the PAN card are copied as is. Till the system shows you a confirmation, no share will move.
Step 2: Enter the OTP that is sent to the registered cell phone number
The OTP should reach your phone within a minute. Input the code and proceed. If you do not receive a message, ensure you check the spam folder or that your phone has a valid network. Do not keep clicking on the resend option. You will be blocked out for a while after you have tried the option multiple times.
Step 3: Enter the KYC details
You will fill in the address, bank details, income range and whether you have traded before. Upload the documents you kept aside. If you select yes, one additional step will ask for Aadhaar details (after you enter another OTP), thereby saving you from inputting the information. But read through the form before you reach the submit button. Auto-fill options tend to fill the PIN code incorrectly more often than not.
Step 4: Please send/receive your Registered Email ID details to get a Demat Account
Check the same email id for the confirmation message. The mail could have also been sent to the spam/junk folder. Within the same day is a safe estimate for when the mail should arrive; processing can take an additional 2 days if your photo is not clear. They will ask you to reupload the picture till they get a clear image. Till you get the mail, the account will not be active.
When does the account switch on?
Save the IDs in a memorable place. Log out and log in afresh, even if you do not plan to purchase today. Change the default password and enable additional security measures. Ensure that the bank account linked to the profile is yours.
One can buy only after the status changes to active. Till then, while the market prices are shown, you cannot place an order. Ensure you do not raise a ticket within the first hour, as it is normal for the process to take longer than expected.
Look out for 2 IDs and not 1. Your demat account will hold the shares in electronic form. The trading account enables placing orders. The two accounts are linked and are opened simultaneously. Do not confuse the two account numbers with the support executive; hence, write down the numbers.