Demat or Dematerialised accounts are a great way for most people to make money on the side. For investors trading in the securities markets, it is compulsory to have an online account.
According to SEBI, there are around 44.46 million Demat accounts in the country. In its most basic form, it is nothing but an electronic account to hold shares and securities. With a growing economy, more people are looking to get on the stock exchange train.
However, as big as numbers might be SEBI has also shown that almost 75% of accounts are dormant. An unused Demat account is a drain on finances and attracts annual fees and maintenance charges. Hence, it's a good idea to avoid any unnecessary expenditure and close your Demat account online.
There are two types of Demat account closures:
Process to close a demat account in case of account closure:
Step 1 - Download the Demat account closure form from your depository participant’s (bank or investment agency) website.
Step 2 - Then fill in the form accurately and submit it with your KYC documents. Make sure all the proofs are valid. This step involves physically submitting the forms and documents to the closest DPs office or by mailing them to the concerned head office.
Step 3 - If more than one person holds the account then both need to sign the closure form in the presence of an official from their DP.
Step 4 - Ensure that there are no shares in the account and it does not have a negative balance. This can be checked by logging into your account.
Process to close or delete a demat account in case of transferring pending holdings or shares from one Demat account to another:
Step 1 -India has two national depositories, NSDL and CDSL. In case of intra-depository transfers, an Intra DIS slip will be required and the ‘Off-Market transfer option in the Demat account must be chosen as well.
Step 2 - Then the original CML (client master list) with the logo, stamp and signatures must be acquired from the account.
Step 3 - After this, the completed form with relevant details and names of the shares you wish to transfer along with their ISINs must be mentioned. The target client will also have to be stated along with their ID which is a 16-character code.
Step 4 - Post this the documents must be submitted to your DP’s office or mail it to their head office.
Step 5 - For closure, it is also compulsory for a bank official to verify the self-attested Demat closure form.
Though Demat accounts cannot be completely closed online, they can be made easier by fulfilling the formalities online. It is imperative to check if there are no overdue charges, penalties or shares pending in the account and that the details are filled in accurately. While transferring any shares or accounts, the individual’s details must be checked to avoid any mistakes or lapses.
Related Articles: How To Transfer Shares From One Demat Account To Other? | How Do I Add A Nominee To My Demat Account | Want to Open a Demat Account? Here's What You Should Know | How to Open a Demat Account Without a Broker | Importance of Monitoring your Demat Holdings Account