Frequently Asked Questions
What is a Demat Account?
A Demat account lets you hold and manage your shares and other securities in electronic form instead of on paper. It works like a digital locker that keeps all of your investments safe and easy to find. These include stocks, bonds, mutual funds, ETFs, government securities, and IPO allotments.
In India, you have to have a Demat account if you wish to buy or sell shares on the stock market. It makes transactions safe, quick, and paperless, and it lowers the danger of theft, loss, or damage to physical certificates.
Why do I need a Demat Account?
You need a Demat account to hold and exchange shares electronically, which is necessary for investing in the Indian stock market. It keeps securities safe, makes transactions faster and without paper, costs less than actual physical share certificates, and makes it easy to keep track of investments like stocks, bonds, ETFs, mutual funds, and IPOs - all in one place.
What documents are needed to open a Demat Account?
You usually require these documents to open a Demat account:
- Proof of Identity (POI): PAN card (mandatory)
- Proof of Address (POA): Aadhaar card, passport, voter ID, driving license, or utility bill
- Bank Proof: Cancelled cheque or a recent bank statement or passbook
- Photographs: Recent passport-size photo
- Income Proof (if you’re trading in derivatives): Salary slip, ITR, or bank statement that shows your income
Are there any charges to open a Demat Account?
Opening a Demat Account does not cost anything. You can open the account online without having to pay a charge. But depending upon the subscription plan you choose, you may have to pay other charges like Annual Maintenance Charges (AMC) and transaction-related fees.
How long does it take to open a Demat Account?
It doesn't take long to open a Demat account, and it's all digital. If all the documents are in order, the account is usually activated within a few hours to 24 hours after it has been successfully verified.
Can NRIs open a Demat Account in India?
Yes, NRIs can open a Demat Account in India, however they need SEBI's clearance through the Portfolio Investment Scheme (PIS). This lets them trade in Indian stock markets while still following FEMA rules.
Can I link my Demat and Trading Accounts?
Your Demat and Trading accounts are linked by default. This makes transactions easy. When you buy shares, they are credited directly to your Demat account, and funds are debited from your linked bank account. This enables real-time, paperless trading, and makes managing your portfolio easier.
Can I withdraw money from a Demat Account?
No, you cannot directly withdraw money from a Demat account, because it only holds securities in electronic form, not cash. You need to sell the securities in your linked Trading account to get money. The proceeds from this sale is then credited to your linked bank account. A Demat account is for holding and managing securities, while your Trading account and bank account handle the actual funds.
What types of securities can be held in a Demat Account?
You can keep a variety of securities in electronic form in a Demat account. This comprises:
- Stocks listed on stock exchanges
- Mutual fund units
- Bonds and debentures
- Exchange-traded funds (ETFs)
- Government securities
- Shares allotted through initial public offerings (IPOs)
- Non-convertible debentures (NCDs)
A Demat account is like a digital locker that keeps all these instruments safe and makes it easy to trade, keep track of investments, and manage a portfolio.
Can a Demat Account be opened jointly?
Yes, you can open a joint Demat account with up to three holders. All account holders will need to complete KYC and provide documents.
Can I have more than one Demat Account?
Yes, you can open more than one Demat account if you need to. However, it's vital to know that one PAN can only be linked to one Demat account with one Depository Participant (DP). This means that you can have accounts with different DPs, but a single DP can't hold more than one account for the same PAN.
Is nomination mandatory in a Demat Account?
Yes, according to SEBI's guidelines, a nominee is compulsory. This will facilitate smooth transfer of your investments in case of untimely demise.
Can I open just a Demat Account without a Trading Account?
A Demat and Trading account are opened together as a 2-in-1 setup. This ensures seamless transactions, where you can both hold securities and buy or sell them without needing separate accounts. Opening only a Demat account is not offered as a standalone option.
Can I apply for IPOs using my Demat Account?
Yes, you can use your Demat account to apply for IPOs. You need a Demat account to receive and hold the shares once they are allotted. You can apply for live IPOs directly from the platform, and the allotted shares are credited to your linked Demat account.
Why should I open a Demat Account with Bajaj Broking?
You get the following with Bajaj Broking:
- The Freedom plan lets you open an account for free
- A fully online and paperless process
- Options for low-margin and low-brokerage trading
- Access via web and mobile app
- Expert support and a robust tech platform
Am I eligible to open a Demat Account?
Yes, provided you’re aged 18 or older and have the required documents. Minors can even open accounts under guardian supervision.
What is dematerialisation?
Dematerialisation is the process of converting physical share certificates into digital form. It cuts down on paperwork and makes trading more convenient.
Can Demat Account be transferred?
Yes, you can transfer a Demat Account from one Depository Participant (DP) to another. To do this, you can either submit a properly completed Delivery Instruction Slip (DIS) or request the DP for it through online transfer using either CDSL or NSDL’s Speed-e service. The DP's policies determine the transaction fees they charge.
What are the transaction fees for transfers in a Demat account?
Transaction fees for share transfers vary depending on whether you are transferring within or outside Bajaj Broking. The charges for transferring shares for Off Market Transfer – within Bajaj Broking as well as for Off Market Transfer – outside Bajaj Broking, the charges are ₹50 or 0.0002% of the transaction value, whichever is higher, plus applicable taxes.
Are there annual maintenance charges for a Demat account?
Most Depository Participants pay an Annual Maintenance Charge (AMC) to keep their Demat Accounts running. With the Freedom Pack, Bajaj Broking lets you open an account for free and doesn't charge you an AMC for the first year. After the first year, AMC applies to the plan you choose: Freedom, Professional, or Signature.
Is there a fee for closing a Demat account?
No, it doesn't cost anything to close a Demat Account. You need to fill out a closure request form in order to close the account. You can only close the account if all of your dues are paid and there are no securities left in it. The Depository Participant will close the account after verification of the documents, and no fees will be charged.
Can I freeze my Demat account on the Bajaj Broking app in case of suspicious activity?
Yes, you can ask to freeze your Demat Account if you see any suspicious or unauthorized activity. If you freeze your account, you won't be able to make any debit transactions or move any securities until you send a formal request to your Depository Participant to unfreeze it.
