The Covid-19 pandemic has changed everyone’s life in some shape or form. Many millennials, having fallen prey to job and pay losses, have taken to investing in the stock market in their search for alternative income streams.
Being confined to our homes has afforded many of us the time and opportunity to research and invest in securities. Technology has also been a game-changer in the personal finance space for many Indians in the last year or so. According to data published by the Securities and Exchange Board of India (SEBI), new dematerialized of shares (Demat) account additions increased to an all-time high of 10.7 million between April 2020 and January 2021. For perspective, the number of new demat accounts opened in FY 2020 stands at 4.7 million.
The ability to trade in securities at the click of a button means that it will remain a mainstay for Indians for the foreseeable future. The first step in doing so, however, is the setting up of a demat account. This article is a guide to opening your online demat account from the comfort of your homes so that you can get started on your trading journey.
How to open a demat account online
The following are 6 easy to follow steps to setting up a demat account online:
Step 1: Choose a Depository Participant (DP)
DPs are agents of depositories in India such as the National Securities Depository Limited (NDSL) and the Central Depository Services (India) Limited (CDSL). In India,, entities such as banks, stockbrokers and digital investment platforms offer DP services. When choosing a DP, it may help to pick a service provider whose features match your investment plan.
Step 2: Fill in your Demat Account Opening Form
Visit your DP’s website and fill the online Demat account opening form required to open a Demat account.
Step 3: Complete Know Your Customer (KYC) Procedures
After submitting the online Demat account opening form, you will be asked to complete the KYC procedures. This would require you to submit scanned copies of KYC documents such as your address proof, identity proof, bank statements, as well as income proof. It might be helpful to keep the required documents in hand before beginning this step in order to complete it quickly.
Step 4: In Person Verification
After submitting your Demat account opening form along with the requisite KYC documents, your DP will ask you to go through a process called ‘In Person Verification’ (IPV). An executive may be assigned to verify the authenticity of your identity and your documents. This is normally carried out by a home visit. However, given the current situation, a tele-verification is a likely alternative.
Step 5: Sign the Agreement Copies
Once you have completed the IPV, you will be asked to sign an agreement with your DP. This agreement contains the rights and duties of, and defines the relationship between, you and the DP. Please ensure you go through the contents of this agreement carefully.
Step 6: Get your BO ID Number
Once the agreement copies are signed and your application processed, your DP will provide you with your very own Beneficial Owner Identification (BOID) number, which you can use to access your Demat Account. You are now ready to begin trading!
By following the steps above, one can learn how to open a demat account. This will be an important first step in your investment journey and opens up various investment opportunities. You can open a free demat account easily now at the click of a button.
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