Transfer Shares From One Demat account to Another
Introduction:
A Demat account is mandatory to trade or hold shares in India. As a result, several newbie investors open their Demat accounts in haste to start trading in stocks without conducting in-depth research on the stockbroker. And more often than not, they realize their mistake later and wonder if they can transfer their shares from their current Demat account to a new one.
There can be multiple reasons for you to transfer your shares from one Demat account to another. Some of them include:
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- You might want to shift to a trading platform that is offering better facilities and services
- You might incur lower brokerage charges with another stockbroker. This could result in greater profits
- You wish to change your depository participant for a new one that can provide better returns with lower expenses
- You are struggling to trade seamlessly with your current Demat account provider. For example, your trades are not getting executed in real-time or you are facing difficulties in adding to withdrawing money from your trading account
- You want to shift to a discount broker from a full-service broker or vice-versa
- You may have more than one Demat account and plan to consolidate all your shares in a single Demat account
Is it possible to transfer shares from one Demat account to another?
The good thing is that you are allowed to transfer your shares from one Demat account to another if you don’t wish to remain stuck with your current stockbroker. The procedure to transfer your shares has been discussed further in this article. But before that, you must learn about the different types of transfers:
- Intra-depository Transfer
When the transfer of shares takes place within the two Demat accounts managed by the same depository, it is known as an intra-depository transfer.
- Inter-depository Transfer
When the shares are transferred to a new Demat account maintained by a different depository, the transfer is said to be an inter-depository transfer.
Steps to transfer shares from one Demat account to another
There are two ways to transfer shares from one Demat account to another – Manual and Online. Let’s learn the steps to transfer your shares manually first:
Step 1 – Ask for a Delivery Instruction Slip (DIS) from your current stockbroker and fill in the following details in it:
- The Beneficiary Owner ID (BO ID) or Target Client ID
- International Securities Identification Number (ISIN)
- Depository Participant name
- Mode of Transfer – Intra-depository or Inter-depository
Step 2 – Sign the DIS and submit it to your existing Demat account provider
Step 3 – The transfer of shares will take place within three to five business days
Now, let’s look at the steps for the online transfer of your shares:
Step 1 – Visit your depository’s website to register for the transfer
Step 2 – In the case of CDSL, the online transfer of shares is facilitated through the “EASIEST” facility, and in the case of NSDL, it is done through the “Speed-e” facility
Step 3 – Enter the details to fill out an online form
Step 4 – Submit a printout of the duly filled form to your current Demat account provider
Step 5 - Your stockbroker will verify the details in the form. Upon verification, it will submit the form to the depository participant for further action
Step 6 – You will receive your login credentials on your e-mail id. You can log in to your account on the depository’s website and transfer your shares from one Demat account to another
Things to remember before transferring your shares
As you can see, applying for the transfer of your shares from one Demat account to another isn't too complicated. However, you must remember a few things before doing so:
- No taxes are levied if you transfer your shares to another Demat account in your name. However, if you transfer your shares to your spouse, children, or parents, you may have to provide a legitimate reason to avoid tax liability
- Your current stockbroker may ask you to pay a fee for transferring your shares
- You may choose to close or keep your Demat account after the transfer is complete
You must take care of the points mentioned above before applying to transfer your shares from one Demat account to another. With Motilal Oswal Demat Account, you can enjoy the lowest brokerage rates in India and get free investing tips.
Related Articles: Want to Open a Demat Account? Here's What You Should Know | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account
