If you’re curious about the stock market and are looking to invest in stocks, the first step is to create a Demat account. No matter your ultimate financial objective, a Demat account is a prerequisite for conducting any transactions in the share market. This article highlights how to open a Demat and trading account.
What is a Demat account?
Demat accounts, or dematerialised accounts, allow you to hold shares of a company electronically. A Demat account enables you to hold dematerialised securities such as stocks, mutual funds, exchange-traded funds (ETFs), bonds, etc.
When you place an order for a stock, your shares are credited to your Demat account. Similarly, your Demat account is debited whenever you sell your shares.
How to create a Demat account and a trading account online?
According to SEBI data, new Demat account additions rose to an all-time high of 10.7 million between April 2020 and January 2021. Furthermore, with the advent of technology, opening a Demat account has never been easier. Simply follow these steps on how to open a Demat account with 5paisa.
1. Visit 5paisa's website to Open a Demat Account.
2. Enter your phone number and click on “Open account Now.”
3. You will receive a verification code on the same number. Insert the code and click on the “Apply Now” button.
4. Next, enter your email address and the verification code sent to your inbox.
5. Enter your PAN number and date of birth, and click on “Proceed.”
6. Complete the E-KYC (Know Your Customer) process
7. Complete the Verification Procedure. This will require you to upload a selfie in real time.
8. E-sign the form to complete your account opening procedure.
You can also follow these four easy steps on how to open a Demat account online using the 5paisa app:
1. Install the 5paisa app from Google Playstore or Apple Store.
2. Choose the option to 'Open Demat Account'.
3. An executive from 5paisa will contact you and assist you in opening an account.
4. Complete the KYC process and submit the required documents.
What documents are required to open a Demat account?
● Proof of identity: Voter's ID, Aadhaar card, PAN card, passport, or driving licence
● Proof of Address: Ration card, electricity bills, telephone bills, property tax receipts, passport, bank passbook, voter's ID, or Aadhaar card
● Proof of Income: Photocopy of the Income Tax Return (ITR), recent salary slip, bank A/C statement of the current bank, or cancelled personalised cheque.
Demat Account Opening Charges
These are the charges involved with opening a Demat account with 5paisa.
|Transaction||Type of Charges||Fee|
|Trading Account Opening Charges||One Time||Rs 0 (Free)|
|Demat Account Opening Charges||One Time||Rs 0 (Free)|
|AMC or Annual Maintenance Charges for Trading||Yearly Fee||Rs 0 (Free)|
|AMC or Annual Maintenance Charges for Demat Accounts||Yearly Fee||Rs 300|
Factors to consider while choosing the best Demat account for trading
1. Ease of Opening an Account
SEBI mandates a complete process for service providers to follow when creating a Demat account. However, they can simplify some aspects of the steps to open a Demat account.
For example, using your Aadhaar number, you can open a Demat account through the e-KYC process. Through e-KYC, clients only need to provide a final self-identification through a video camera or a selfie. A physical account opening takes approximately five days, whereas e-KYC takes less than two days.
Most brokers have their own software that you can install. You can find out which app has the best interface by performing some research or reading reviews. It is also possible to download different mobile apps from different DPs and choose the one that works best for you. An account with an intuitive interface that does not lag can be helpful and convenient.
3. Account opening charges
There are various charges associated with Demat accounts, including Annual Maintenance Charges (AMC), charges for physical and duplicate statements, and costs associated with dematerialization and rematerialization. It is, therefore, crucial to confirm the DP's costs to ensure that they are fair and in line with industry standards.
To get a better idea of how the DP stands, you could compare the costs with those of other similar service providers. Although cost savings are important, they shouldn't always take precedence. It is also important that the DP provides you with high-quality service.
Open a Demat account with 5Paisa
Now that you know how to start a Demat account, you can create a free account using 5paisa. There are no brokerage fees, so you won't have to pay for a Demat account. Additionally, it has an easy-to-use interface that makes it the best free Demat account on the market. Moreover, you will receive regular updates on the latest investment opportunities.
To begin trading and multiplying your wealth, open a free 5paisa Demat account today!
Q1. Are there any charges to open a Demat account?
Ans. AMCs, physical statements, and costs involved in dematerialisation and rematerialisation are some of the charges associated with Demat accounts.
Q2. Which website to use to open a Demat account?
Ans. You can visit the 5paisa website and open a free Demat account. It offers the best services on the market and is the best choice for opening a Demat account.