Securing documents in an electronic form is much more seamless than storing them in a physical form. A demat account, thus, facilitates keeping your financial assets securely in an electronic form. Any beginner in the share market would get utterly confused at the knowledge of demat accounts. So, to simplify the confusion and give an elucidating explanation on those questions, here’s answering most asked Demat Account FAQs.
FAQ 1: How to Open a Demat Account?
Opening a free demat account doesn’t require rocket science; you only need to follow a couple of steps for it. Applications are required to carry the original documents under the attestation of a DP professional. The investors require signing the agreement with the DP in the prescribed standard form. The DP shall open the account and handover the unique account details like account number, etc.
FAQ 2: Will an NRI Require Permissions from RBI to Open a Dematerialized Account?
Consider the best demat account having the highest ratings on the internet! You’d find your answer by surveying in no time! But, to speak simply, the answer here is a NO. The NRI would never require permission from RBI if he or she wants to open a demat account. Nonetheless, debits and credits from their demat account will require specific or general permissions if and when required from the designated authorized source.
FAQ 3: Will One Investor Open Multiple Dematerialized Accounts?
Shareholders can have many demat accounts under their names individually. Additionally, an investor can opt for multiple accounts with an attestation of either the same or different DPs. But the truth is an investor requires complying with required documents individually for each demat account.
FAQ 4: What Facilities Can an Individual Get Upon Opening a Demat Account?
The following are the facilities an investor can get after he or she opens an account:
- Firstly, demat accounts can be used for transferring investor’s shareholdings
- Secondly, it can offer a loan facility to the investor. In case the demat account holds securities, the account holder has access to apply for a loan.
- A functional demat account can carry forward the job of security conversion into various forms seamlessly. It is possible to convert electronic shares into the physical ones or the other way round.
- Having demat accounts gives users an opportunity to avail of holding securities benefits. For instance, when the company offers dividends, refunds, or interests to the traders, ones who have demat accounts can access those benefits.
FAQ 5: What Are the Documents Required for Opening a Demat Account?
Given below are the documents required for creating a dematerialized account:
- Proof of Your Income: ITR or Income Tax Return’s Photocopy, salary slip, Internet certificate are accepted as the income proofs of the candidate
- Identity Proof: Aadhar, PAN card, Driving License, Voter ID, and Passport are accepted as identity proofs of the candidate. One can also get Identity cards that get issued by the State or Central Governments, public sector undertakings, statutory bodies, and more.
- Address Proof: Voter ID Card, Passport, Residence’s Sale of Agreement or Registered Lease, Bank Statement (less than 3 months), and Driving License are accepted as address proofs. The address of the spouse is also accepted.
The Last Call
These are the mostly-asked FAQs related before opening a demat account. Now that you’ve decided to proceed seamlessly, it’s better to do your research work to find a trustworthy financial partner to begin investing in shares.