How to Open Demat Accounts in 2022?

Equity stock markets had quite a bull run since March 2020. During each bull run, multiple IPOs are also launched to gain the benefits of rising markets. If you plan to invest for a long term, you need to own a Demat account to maintain and trade the equity stock holdings. You can also invest in bonds, REITs, mutual funds, and ETFs through a demat account.

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This article explores various aspects of opening and holding a demat account.

What Is a Demat Account?

Demat stands for Dematerialization, which in simple words means holding securities in digital format. Dematerialization enables the efficient administration of investment records. As an investor, you may hold more than one Demat accounts linked to your PAN card and Aadhaar card. Unlike a savings bank account, there is no requirement of any minimum balance to be maintained in the Demat account. 

You can open a Demat account with any Depository Participant (DP) that is typically a bank, NBFC, financial institution, or broker. A DP is registered with either of the two depositories in India viz. NSDL and CDSL. 

Advantages of Demat Account

Here are some advantages of demat account:

  • A Demat account enables safer holding of your securities, unlike physical form where they are at risk of damage, loss, or theft.

  • As per extant laws, you can transfer shares only if they are held in Demat form.

  • In addition to trading, you can easily track the securities upon purchase that are reflected in the account statement in 2-5 days.

  • You can avail of Loans against securities held in your Demat. 

How to Open Demat Account Online?

Follow these steps to open a demat account online:

  • Visit the official webpage of the DP of your choice.

  • Click on 'Open Demat Account.'

  • Input the requisite details viz. name, address, mobile number, etc.

  • Type in the OTP received on your mobile number in the field displayed on the screen.

  • Input the PAN Card and Aadhaar details in the fields displayed on the screen.

  • Upon successfully submitting the details, you should receive an email or a phone call from the DP to complete the account opening formalities.

  • For KYC purposes, please be ready with passport-sized photographs and scanned versions of PAN Card, Aadhaar Card, Cancelled Cheque, etc.

How to Open Demat Account Offline?

Follow these steps to open demant account offline:

  • Visit the office of the DP of your choice.

  • Write the details viz. name, address, and mobile number in the designated form(s).

  • For KYC purposes, attach a passport-sized photograph(s) and provide a Cancelled Cheque, self-attested photocopies of PAN Card, and Aadhaar card.

  • For verification, keep your original documents handy.

  • Upon submission, your DP will provide you with further details.

Charges On a Demat Account

Demat charges play a pivotal role while selecting a DP. In addition to account opening and annual maintenance fee, transaction charges are payable to every DP. You must note that some platforms also waive off maintenance fee.

Charges are also applicable for each transaction done through the demat account. Fee for each trade or transaction vary depending upon whether your DP is registered with NSDL or CDSL. The applicable fee payable further varies for traders of securities or long-only investors with infrequent trades.

Best Demat Accounts in India for 2022

Demat charges are different than brokerage, which is payable to a broker. However, choosing a Demat account and a broker generally go hand in hand. Many brokerage houses have introduced a '3-in-1 account' that combines savings bank account, Demat account and trading account.

We provide below a list of brokers that provide you with a combined package of brokerage and Demat account with an additional option of a savings bank account. We have shortlisted them based on the market share these brokerage houses command, thus implying better service and trust and confidence in customers. 

In addition, many of these brokerage houses offer both the options of a Demat account with NSDL or CDSL, and their Demat transaction charge depends accordingly.

Here are the best demat accounts in India:

  1. Zerodha

    Zerodha initiated the discount broking model and provided retail brokerage, commodities trading, bonds and mutual funds investment services. The brokerage house commands the highest active client base with a high market share. 

    The platform offers a combined package of brokerage and Demat account with features such as:

    • No brokerage on delivery of stocks and mutual funds

    • Flat fee of Rs. 20 per trade for F&O and intra-day

    • Leverage of upto 20 times on intra-day trades

    • User-friendly

    • Free-market education through Varsity

  2. Upstox or RKSV

    Earlier known as RKSV Securities, Upstox is also a discount broking firm with a strong backing by well-known investors, viz. Ratan Tata, Tiger Global, and Kalaari Capital. It operates on an online business model with competitive brokerage plans. 

    Some of the features of Upstox are: 

    • Upstox offers free Demat and trading account for a limited period, and it is valid for new users only. 

    • Equity delivery, F&O, commodity and currency at Rs. 20 per order. 

    • Mutual fund and IPO investments can be made at zero brokerage. 

  3. HDFC Securities

    HDFC Securities is part of the well-established HDFC group that offers its services via online and offline modes. As its customer, you can trade on NSE, BSE, IRDA, AMFI, PFRDA, and MCX. 

    Some of the features of HDFC Securities are:

    • '3-in-1 account' facility, which can be started in a short time online.

    • Derivatives order fee should be Rs.10 per order. 

    • Stock recommendations are known as 'Pick of the Week' offerings, which have a 90% success rate, as per the company.

    • Voice-Enabled Investing assistance. 

  4. ICICI Direct

    ICICIdirect, a subsidiary of ICICI Bank, is one of India's highly acclaimed retail brokers. The company has a trusted clientele base of 6 million customers that also hold its '3-in-1 account' with demat facilities. 

    Some of its features are: 

    • Over 50 products offered under one roof, including equity, mutual funds, F&O, and corporate fixed deposits

    • Several customer-specific brokerage plans

    • Award-winning research and offers for customers with One-Click investment portfolios in stocks, ETFs & mutual funds

    ICICI Direct’s Investonomics platform helps extend your knowledge on investment and encourages you to invest for long-term for maximum returns. 

  5. Kotak Securities

    This company, part of the Kotak Mahindra Group, is among the top 5 full-service brokers and is among the few offering 3-in-1 accounts. In addition, it offers several multi-asset class investment and trading services. 

    Features of Kotak Securities demat account include:

    • Investments across products including derivatives, mutual funds, and IPOs

    • Variety of brokerage plans to suit varied needs of investors and traders

    • Research-driven reports across companies and sectors

    • Portfolio management services

  6. Angel One

    Angel One (previously Angel Broking) is an independent full-service stockbroker. 

    Some of its features are:  

    • Seamless and safe online share trading platform

    • Huge sub-broker network with PAN India presence rendering quality service

    • AI-backed ARQ platform with best-in-class robot-advisory service

    • Regular podcasts and videos for helping investors make better financial decisions

    • Zero brokerage for equity delivery and Rs. 20 per order for F&O, commodity, currency trades

  7. Groww

    Groww has a strong backing of investors like Sequoia Capital, Tiger Global, Ribbit Capital, and Propel Venture Partners. Starting as a platform to directly invest in mutual funds, the company has now ventured into the broking domain.

    Some of its features are:

    • Trading in equity, Demat service, mutual funds, intra-day, and IPO 

    • Simple interface for trading via web and mobile app

    • Equity investment, including intra-day and delivery facility available

    • Option to invest in US stocks

    • Option to invest in digital gold and corporate fixed deposits

    • Fingerprint scanner for safe login

    • Resources such as videos, blogs, and ebooks to meet beginner investor’s requirements

  8. 5Paisa.com

    5Paisa is a low-cost broker with a motto, "A Paisa Saved is a Paisa Earned'. It was initially part of the IIFL Group, which was founded by Mr. Nirmal Jain. However, 5Paisa started operating as an independent entity in 2017. 

    Some of its features are:

    • Free Demat account opening facility

    • All-in-1 account for stocks, mutual funds, commodities, and currency

    • Flat fee or zero brokerage

    • Omni-channel support on mobile, desktop, and call centre

    • Option to buy international research and tools

    • Artificial intelligence-backed robot advisory for stock recommendation

Final Words

Opening a demat account is quick and hassle-free process. You can contact your bank’s nearest branchy or relationship to know the details. However, you should always carry out your research beforehand to choose your suitable option or at least have an idea of the service.

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