If you’re looking to buy securities (like shares, mutual funds or ETFs) online, a dematerialized account is absolutely essential. Apart from the obvious benefits it offers (it’s cheaper and faster), it’s also a requirement when you wish to register yourself with any brokerage.
Key Points
- There are two ways to start with your account: the online account opening method and the traditional method of submitting physical forms.
- Choosing a broker who fits your trading style and understands your financial goals is more important than the method you use to open your account.
- Sometimes brokers charge more for submitting physical forms, therefore, ensure that you check all the account opening costs associated with the opening procedure.
How to open a demat account
Before you get started on the demat account opening procedure, select your broker. This choice could depend on a variety of factors - such as brokerage fees/charges (more on this below), the platform’s / user interface, and its customer service.
In today’s digital world, the way you apply for your account matters. Your broker is the one who’ll help you open a demat account in the easiest way possible. Is it the traditional method involving paper forms? Or the new-age Aadhaar-based paperless online method?
We’ll lay them out here for you and let you figure out what’s easier.
Steps to open a demat account
The online account opening method
In today’s digital world, there really shouldn’t be any reason for you to be filling out physical forms when almost the entirety of your information can now be stored digitally. Fortunately, some brokers have the online processing part figured out. Customers can sign up and complete the registration process online. As long as you have an Aadhaar card with your mobile number linked to it, you’re good to go!
- Head to the Upstox online demat account opening page.
- Enter your basic details, and click Sign Up.
- Keep scanned copies (i.e. soft copies) of your documents (Aadhaar, PAN, Cancelled Cheque, and your latest bank statement) with you for when you are directed to upload them.
- Enter your Aadhaar details and the OTP you receive on your linked mobile number in order to verify your identity.
That should be it. Your demat account should now be created.
Traditional/offline account opening process
- Your broker will hand you an account opening form - either when you’ve visited its office or if you’re meeting one of its employees.
- You will need to fill out this form, and attach a proof of identity and a proof of address. These proofs can be submitted using photocopies of appropriate documents.
- Once done, you’ll also be expected to sign an agreement with your broker. This document will state your responsibilities as a trader/investor, and that of your brokerage firms. Keep a copy of this document with you for future reference.
- Once your broker verifies and processes your documents, you’ll be given your account number, similar to how you receive a bank account number. This number is called the Beneficial Owner Identification Number (or BOID) or Unique Client Code (UCC) if you’re trading with Upstox.
You’ll also receive additional confidential data - such as a Login ID and key for accessing online portals and placing trades. Keep in mind that these transactions are likely to attract charges. You might incur some charges for using certain portals.
Demat account charges
There are multiple sorts of demat account charges you’re likely to come across - both during the time when you hunt for your preferred broker and when you’ve completed your registration process. Primarily, these charges can be classified into 3 types:
- Account Opening Fees
- Annual Maintenance Fee
- Transaction Fees
Account Opening Fees is the fees your broker will collect for the whole process of registering your demat account. Not all brokers charge this fee, so you’re likely to come across a few where you would not be paying any such fees. Some online brokers might charge a nominal account opening fee to trade on different segments.
Demat account opening fees is Nil. An Annual Maintenance Fee of Rs. 300 plus GST is charged to Individual clients. (Note: For newly onboarded customers, AMC is free for first year)
Upstox continues to keep costs low with the Transaction Fees as well - charging Rs. 20 plus GST (Rs 5.5 being CDSL’s depository charges).
While discount brokerages charge low account opening fees and brokerage, that’s not to say they cut down on services. For example, it is entirely possible to open an account using the traditional paper method on Upstox as well. Head over to the forms section and download the demat account opening form. You can choose the segments you want to trade on while opening your account. Fill out the forms, attach the required documents, and send them over via courier to this address:
30th Floor, Sunshine Tower,
Senapati Bapat Marg, Dadar (W),
Mumbai- 400 013
If you see the merits of a convenient and online Aadhaar-based registration, you’re welcome to get started with the online demat account opening.
Wrapping Up
- You can open a dematerialized account online by filling out forms on the broker’s website. Ensure that you keep all required documents handy.
- With the spread of cashless transactions and increasing reliance on digital technology in the financial world, opening an account with stockbrokers has also moved to an online portal.
- The traditional method of opening an account involves printing out the physical forms and sending them via courier to your broker’s address. While making the decision to choose one type of account opening procedure over the other keep in mind the account opening fees and hidden courier charges.