Demat Account Transfer

Isn’t it a luxury to execute Demat Account transfer and that too, with much ease? Before diving into the details any further, we’ll brief you about Demat Account.

After the implementation of the Depository Act in 1996, opening a Demat Account was necessitated. Technically, a Demat Account is known as Dematerialised Account by the experts in the Stock Market.

The meaning of dematerialization (if you don’t know) is that your shares are stored in an account in an electronic format.

National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) maintain the Demat accounts across India.

The question that pops up in our head is – Can we transfer Demat account? A straightforward answer is No. You can’t transfer your Demat account.

Although if your question had been – how to transfer Demat account from one broker to another, we’d have responded affirmatively.

So, shall we dive into the specifics?

How to Transfer Demat Account from One Broker to Another?

The method of transfer depends on the broker. Some of them offer the manual or offline procedure & the rest of them provide it online.

Two ways that execute the process of Demat account transfer are

Online Demat Account Transfer

Do you trade only with CDSL?

Congratulations! You have the facility to execute an online Demat account transfer.

The steps to carry out are:

1. Visit the CDSL website and register yourself on the ‘Register Online’ link.
2. Fill the form with the necessary details.
3. Select the option to print the form.
4. The Demat Account gets transferred to the respective Depository Participant. 
5. After completing the verification by the depository participant, you’ll receive a password to your registered email ID.
6. Use this password to log in and transfer the desired shares.

Offline Demat Account Transfer

In cases where your current broker and the new broker are associated with different Depositories, the Manual Demat Account Transfer takes place. 

The trader needs to fill the DIS (Debit Instruction Slip) with this information:

1. List the shares you wish to transfer.
2. Also, record the International Securities Identification Number or ISIN, a 12 digit number that helps identify securities such as equities, debts, stocks, etc.
3. Make sure the ISIN is correct as the transaction will be processed based on this.
4.  Note down the Target Client ID.
5. Select the right option – Off Market Transfer or Inter Depository Transfer.
6. Be careful to mark the right choice.

After the DIS gets filled, you need to submit this to your existing broker. You’ll receive an acknowledgement slip in return.

It takes around 3-5 business days to execute the Demat Account Transfer. The broker may or may not apply charges against it.

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Demat Account Transfer Form

As discussed above, Demat account transfer gets processed by two methods, online and offline.

In the case of offline Demat account transfer, the form is available at the broker’s office, and for online Demat account transfer, you can access the Demat account transfer form from CDSL’s website.

For your reference, here is the NSDL form for you.

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Demat Account Transfer Charges

When a trader decides to walk down the road to Demat account transfer, some brokers let you transfer with no charges.

But some might charge you a small amount. These charges vary from broker to broker.

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Demat Account Transfer Money

Every stockbroker aims to facilitate their traders with eased trading practices and the fastened process of Demat account transfer money. There is a range of procedures that accelerate fund transfer.

From net banking to UPI & offline methods, every possible way to carry out the process of a money transfer gets extended to the traders.

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Demat Account Transfer Physical Shares

The process of transferring your physical shares to a Demat account is known as Dematerialisation, and Demat is the short form of this term.

This process is easy to execute.

1. If you have a Demat Account already, you can skip this point. The first step towards dematerialization is opening a Demat Account with a broker you feel is right for you.
2. Next, you need to surrender your share certificates to the respective broker.
3. A dematerialization request form (DRF) is to be submitted along with the share certificates. 
4. Wait for the shares to be credited to your Demat account.

Congratulations! You just dematerialized your shares.

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Demat Account Transfer Nominee

Demat accounts, as registered, are by default treated as the holder has opted out of the nomination process. In this case, the account holder has to download the form for adding a nominee or visit the DP office in person to add them.

Some brokers offer the option to add a nominee in the demat account during the registration process.

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Demat Account Transfer After Death

A Demat account can have a single holder or joint holders. In either case, if a holder dies, the Demat account transfer takes place according to the situation. The situations and respective procedures are listed below:

Nomination Exists

Since the single account holder had registered a nominee, the process is simple.

• Download the transmission from the website or visit the DP’s office.
• Fill in the form and attach a notarized copy of the death certificate duly attested by a Gazetted Officer or a Notary Public.
• DP carries out the In-Person verification of the documents.
• The securities then get transferred to the nominee’s account of the DP.

No Nomination

When the sole holder of a Demat account dies with no registered nominee, the securities are transmitted to the legal heirs as determined by the competent court orders.

But, if the securities value is less than ₹1 lakh, the transmission is processed after a duly filled transmission form along with an attested copy of the death certificate, letter of indemnity, and an affidavit in the prescribed format.

The requester must submit a NOC from all legal heirs who do not object to the transmission.

Joint Account

In case it is a jointly held Demat account, the holders need to follow these steps

• The surviving Demat account holders have to fill a transmission form.
• A duly attested copy of the death certificate has to be attached to the above-said form.
• Next, they need to open a new DP Demat account to process the transmission request.

Note: The account holders’ names have to be in the same sequence as the account closed.

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Conclusion

You might be a little sceptical about carrying out Demat account transfer but rest assured, it is very safe. One major point to keep an eye on as you perform this is to talk about the charges involved with your broker.

Demat account transfer can get initiated for a variety of reasons. Be sure of your intentions, and you’re good to go.

Good luck!

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Want to Open a Demat Account, please refer to the below form

 

Know more about Demat Account