According to the regulations laid down by the Securities and Exchange Board of India (SEBI), all investors must link their Demat account with their Aadhar number. As a fact, SEBI has dictated all stockbrokers and depository participants to deactivate the Demat accounts of people who have not linked their Aadhar Card numbers to Demat accounts.
If your account has got deactivated due to non-linking of Aadhaar, you must know how to link Demat account with Aadhaar. So, knowing how to link Aadhaar with Demat account online is vital to continue trading seamlessly. Thankfully, the National Securities Depository Limited or NSDL has made it relatively easy to seed your Aadhar number to your Demat account. The following sections discuss how to link Demat accounts with Aadhar and the best way to do it.
What is a Demat Account?
Before learning how to link Aadhaar with Demat account online, you must understand the meaning and significance of a Demat account.
A Demat account is much like a bank account. Whereas a bank account stores your money, a Demat account stores your shares electronically. Besides shares, you can also keep bonds, treasury papers, exchange-traded fund units, mutual fund units, etc., in your Demat account. You can open a Demat account with the National Securities Depository Limited (NSDL) or the Central Depository Services (India) Limited (CDSL). However, you cannot open a Demat account directly with NSDL or CDSL. You must approach a broker like 5paisa to open a Demat account. It is good to note that while most brokers charge an account opening fee for opening Demat and trading accounts, 5paisa does not charge anything to offer the facility. You may click here to open a free Demat and trading account to trade conveniently.
What is an Aadhaar Number?
The Aadhar number is a unique, twelve-digit number issued and distributed by the Unique Identification Authority of India (UIDAI). You can get your Aadhaar number free by enrolling at an authorised Aadhaar Enrolment Centre. To generate your Aadhar number, you have to provide your name, date of birth, gender, address, mobile number, email ID, etc. The authorities will also verify and capture biometric details through fingerprints, Iris scans, and facial photographs.
Now that you have understood the meaning and significance of Demat account and the Aadhaar number learn how to link Demat account with Aadhaar in the following section.
Why Should You Learn About How to Link Aadhaar With Demat Account?
Here are the top benefits of knowing how to link Aadhaar with Demat account online:
• Your account becomes e-KYC ready, meaning you can invest in a wide range of securities through any broker of your preference without any hiccups.
• Your account will not be deactivated for not complying with the regulations laid down by India's Securities and Exchange Board (SEBI).
• You can conveniently switch between multiple brokerage houses and maximise your profits.
• SEBI will monitor your Demat account. Hence, the chances of fraudulent transactions will be nil to minimal.
• You become eligible to trade in shares, commodities, futures, derivatives, and the likes.
How to Link Aadhaar With Demat Account - The Nine-Step Process
NSDL offers a free, 24x7 facility to help investors link their Aadhaar number with their Demat accounts.
Here is a step-by-step process of linking a Demat account with Aadhaar number:
Step-1: Open NSDL's official website and find the tab 'Link Aadhaar With Demat Account' on the home page.
Step-2: You will be redirected to a new page to link your Aadhaar number with the Demat account.
Step-3: Hit the 'Get Started' tab to begin enrolling.
Step-4: Enter the account holder's name, Demat account number or DP ID, mobile number, client ID, and Permanent Account Number (PAN).
Step-5: Enter the verification code in the provided box and hit the 'Proceed' button.
Step-6: You will receive a one time password (OTP) on your mobile or email.
Step-7: You will see the Demat account details on the screen for your reference. If the details match your entered details, click on 'Confirm.'
Step-8: After clicking 'Confirm,' the NSDL website will verify and authenticate your details before finishing the linking process.
Step-9: Congratulations! You have successfully linked your Aadhar number with your Demat account. You can now trade seamlessly and conveniently.
Can You Trade With an Aadhaar-Linked Demat Account?
No. You cannot trade solely with an Aadhaar-linked Demat account. You need to have a trading account linked to your Demat account to trade in the stock market. You can approach brokers like 5paisa to open a free trading account. You need to do is submit documents like Aadhaar card, PAN card, income proof (only needed for derivatives trading account), a cancelled cheque (for IFSC, MICR, and account number), and a passport-size photograph.
5paisa provides online and offline account opening facilities. You can either open an account from the convenience of your home or visit the nearest 5paisa branch with the documents mentioned above to open free Demat and trading accounts.
So, you know how to link Demat account with Aadhaar number. With this, you have moved one step ahead in the journey to make gravity-defying profits. Choose your broker wisely since a low-cost brokerage house cares for your finances by charging minimal fees and offering maximum functionality.