With the introduction of online trading apps, stock market trading has become more accessible than ever. Opening a DEMAT account is one essential step in starting your investment journey.

A DEMAT account, or Dematerialized account, allows you to hold shares and securities in the digital form, making trading more straightforward and secure compared to the traditional method of holding physical certificates. As a beginner, if you are looking to start your stock & option trading journey, this guide will walk you through the process of opening a DEMAT account online.

Difference between a DEMAT and a trading account

Before we dive into the core content of the article, let’s first understand the key differences between a demat and trading account. Yes, you read it right!

While a DEMAT account and a trading account are often mentioned together, they serve different purposes.

DEMAT account:

• A DEMAT account is used to store your shares and securities in electronic form. It is similar to a bank account, but instead of money, it holds your investments like stocks, bonds, mutual funds, etc.
• When you buy shares, they are credited to your DEMAT account. When you sell shares online through a Demat Trading app, they are debited from your DEMAT account.

Trading account:

• A trading account is used to buy and sell orders in the stock market. In fact, it acts as a link between your bank account and your DEMAT account.
• When you want to buy shares, you place an order through your trading account. The money for the purchase is taken from your bank account, and the purchased stock are credited to your DEMAT account.

Step-by-step guide to opening a DEMAT account

• Choose a Depository Participant (DP):

Banks, brokers, and financial institutions often offer DEMAT services. Compare the services and fees of these DPs before making picking one.

• Visit the DP’s Website:

Once you have chosen your DP, visit their official website. Look for the option to open a new DEMAT account.

• Fill in the Online Application Form:

Complete the required details in the online application form. You will need to provide personal information such as your name, address, date of birth, PAN card number, and bank account details.

• Upload Required Documents:

You will need to upload scanned copies of your documents. You will need:

• PAN card
• Aadhar card
• Bank statement or canceled cheque
• Passport-size photographs
• In-person Verification (IPV):

Some DPs require an In-person Verification (IPV). This can often be done through a video call. During the IPV, you will need to show your original documents to the DP’s representative.

• E-Signature:

You will be asked to e-sign the application form. This is done using your Aadhar number. You will receive an OTP on your registered mobile number to complete the e-signing process.

• Review and Submit:

Review all the information you have provided. Once you are sure everything is correct, apply.

• Processing and Confirmation:

Your application will be processed after submission. Once your DEMAT account is opened, you will receive a confirmation email or message. This usually takes a few days.

Online DEMAT account opening is easy and can be done in a few simple steps. By following this guide, you can start your investment journey with ease.