How to open a Demat Account To Invest in Stock Markets - DMAT

A Demat account is a type of banking account which is needed for an individual to invest in shares, stock markets, or exchange traded funds. Demat account, also known as dematerialised account or DMAT account, is very much popular in India and the SEBI (Securities and Exchange Board of India) mandates a person to open a Demat account for trading more than 500 shares. If you are interested in buy or sell stocks and enter the lucrative world of share marketing, then the first thing you should do is to open a Demat account. Read on to know how to open a DEMAT account and the advantages of opening a DMAT account.

Apply for PAN Card

To open a DEMAT Account you must have a Permanent Account Number or PAN Card. PAN card is a national identification number provided for all taxpayers in India whose income is taxable. If you are not having a PAN card you can easily apply for one with the following documents.

1) Identity Proof – For identity proof you can submit your 10th class SSLC certificate, Ration Card.

2) Address Proof – For proof of address you can submit your Ration Card, Driving License, Recent Telephone Bill. Most of the times they wont accept driving license so it is always good to submit Telephone bill or Ration card as address proof.

3) One Recent Color Photograph - 3.5cm x 2.5cm

Opening a Demat Account

After obtaining a PAN card, the next step is to choose the bank with which you wish to open a DMAT account. Similar to opening a savings bank, almost all popular banks allows you to open a Demat account and start trading stocks. The banks which allows to trade stocks with a Demat account are called Depository Participant or DP. The major Depository Participant in India are ICICI Bank, State Bank of India (SBI), HDFC, IDBI Bank, Axis Bank (previously called UTI Bank), Citibank India, and Sharekhan.

Documents to submit for Opening a Demat Account

To open your Demat account with a Depository Participant or bank you need to submit the below mentioned necessary documents

1) Photocopy of your PAN Card (Permanent Account Number). Keep your original PAN card with you as the bank may ask the same for verification.

2) Your Permanent Address Proof. For address proof, you can take your Telephone Bill (Landline), Electricity Bill, Passport, Voter's ID, Bank Attestation, IT Returns, Ration Card, or Driving License.

For those opening a Demat Account with banks like State Bank of India (SBI), linking your DMAT account with your saving account allows you to verify your holdings online.

Nowadays most of the Depository Participants or banks such as State Bank of India, ICICI, and Citibank allow you to operate your DMAT account online, from your office or home. Hence with the help of a computer and Internet connection, now a Demat account holder can check his/her view holdings, billing and transactions, as well as order Delivery Instructions Booklet, Check ISINs, etc. Online Demat Services makes your trading fast, easy and more efficient.

It is all about how to open a Demat account. Now it’s time for you to apply for a DMAT account and start trading shares and earn money!