Opening Demat Account with Depository

These days every other individual is looking forward to a safe and secure method to invest, and hence the role of demat account in the share market comes into play. But is there any way of opening a Demat account with depository?

In this article, let’s discuss the ways to have a Demat account with different depositories.

Can We Open Demat Account Directly with Depository?

In the stock market, there are two major depositories, NSDL and CDSL, who primarily perform the role of operating and maintaining a Demat account. But where to open a demat account?

And is it possible to open a Demat account with depositories?

As already told, this depository maintains the Demat account but you cannot directly open an account, so how can you start investing in the share market?

For this, there are different depository participants registered with NSDL and CDSL which act as bridge between an investor and depository.

These depository participants or stockbrokers further are categorized as full-service stockbrokers and discount brokers who differ from each other in terms of brokerage plan, trading platform, research, and advisory, etc.

Along with this, there are government registered DPs that allows you to open a Government Demat account like SHCIL.

Depending upon the experience in trading and further on the basis of the requirement you can choose the stockbroker offering you the maximum benefits.

Let’s move ahead to know the connection between the Demat account and the depository.

Demat Account and Depository

Now as already discussed, the stock market has different bodies to manage different activities. Here when it comes to managing the Demat account, there are two different depositories, NSDL and CDSL.

These depositories manage the Demat account and make sure that no kind of fraudulent activities take place. Further, it smoothens the process of buying, selling, and transferring shares from one Demat account to another.

To get the Demat account in the respective depository, one has to approach the registered stockbroker. The stockbroker provides the online or offline provision where one has to follow a few steps for KYC verification.

Once this KYC process meets the depository criteria and is being verified, the Demat account is activated.

Let’s understand the role of depositories in the share market:

• Act a bridge between public companies and their shareholders.
• Eliminates the risk of theft by providing a provision of dematerialization.
• Reduces the paperwork and accelerates the process of buying and selling shares in the market.

Thus, you can assure the safety of your holdings with the depository Demat account.

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Depository and Dematerialization

Till yet, one can easily understand the importance of Demat account, but what is the process of converting the shares in electronic form.

Well for this, there is the process called dematerialization.

Here is the complete process involved in the dematerialization of shares:

• In order to dematerialize the shares, one must have a Demat account with any of the registered Depository participants. Here the client has to submit the registered certificates under his or her name to the DP.
• DP then intimates NSDL/CDSL electronically and sends the securities to the concerned issuer or R&T agent.
• Further depository informs the Issuer/R&T agent electronically to process the request of dematerialization.
• On finding the certificates in the order it registers the depositories and then communicates electronically to the respective depositories.
• On confirmation, NSDL then credits the securities in the depository account of the investor.

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Demat Depository Account Type

Now moving towards the understanding of Demat Account Type, there are different criteria for categorizing the Demat account in India.

Here on the basis of depositories, there are two different types of Demat account with the name of depositories:

• NSDL Demat Account
• CDSL Demat Account

As already clear, the Demat account with the Depository Participant registered with NSDL comes under the former category while the latter includes the depository participants’ Demat account registered with CDSL.

Let’s have detailed information on the stockbrokers and Demat account services with respective depository participants.

NSDL Demat Account 

NSDL or National Securities Depositories Limited offers the services of securing your shares in the dematerialized form and further in maintaining all the transactions.

Here is the list of NSDL registered depository participants.

1. Zerodha Demat Account

The discount broker offers the Demat account services and trading facility to trade in different segments at the minimum brokerage. To access its service, there are Zerodha account opening charges equal to ₹200 for equity and an additional ₹100 for commodity accounts.

Zerodha is the first broker that introduced the discount brokerage model in the stock market industry. As per its brokerage plan, one has to pay the maximum fee of ₹20 per trade.

Grab more details of the stockbroker and start trading now by completing the process of the Zerodha sign up.

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2. Angel One Demat Account

Next is Angel One, the Fintech company that helps you in meeting all your trading and financial needs on one platform. It is a hybrid stockbroker i.e. offering full-broking services at a discounted price.

As per its iTrade Angel Broking plan, you can now trade in the delivery segment for FREE while the brokerage for other segments is flat ₹20 per trade.

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Reach us now to open Angel Broking Demat Account.

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3. Choice Broking Demat Account

Another stockbroker in the Choice Broking. Being a full-service stockbroker, it offers research and advisory services for free thus helping beginner investors and traders to do analysis and pick the right stock.

Its brokerage model differs from the above two stockbrokers but in comparison to the full-service stockbroker, it charges the least with 0.2% in delivery while 0.02% of the turnover value for intraday.

Apart from this, it provides the advanced trading platform Jiffy that makes it easier for traders like you to trade without hassle across segments.

4. HDFC Demat Account

Whether you want to invest in an IPO or looking for a long-term investment in stocks, it is always good to pick a reliable partner.

When it comes to safety, security, and reliability, bank-based stockbrokers like HDFC Securities lead the race. HDFC Securities account opening gives you access to trade across segments. However, the HDFC brokerage is higher in comparison to another stockbroker.

Consider your requirements and open the Demat account with one of the most secure stockbrokers registered with NSDL.

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5. Kotak Demat Account

Another bank-based stockbroker, Kotak Securities has recently come up with the Trade Free Plan for traders where one can now trade for FREE in the intraday segment.

Other than this, the broker offers research tips and advisory services that help investors and traders to plan their investments and to trade in specific stocks seamlessly.

Get started now by opening Kotak Demat account now.

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NSDL Demat Account Opening 

After knowing the charges for Demat account and AMC for Demat Account, let’s learn about the account opening process. With the advancement, almost every other stockbroker registered with NSDL offers an online way to open a Demat account.

So, in order to sign up with the registered DP, all you need is a good internet connection and a few documents required for Demat account.

Once you meet all the requirements, follow the steps mentioned below:

• Visit the stockbroker website with whom you want to open a Demat account.
• Click on the link to Open Demat Account.
• Fill in the basic details like Name, Mobile Number and City.
• Verify it by entering the OTP.
• Now enter some more basic details, like income, address, etc.
• Provide bank details.
• Upload the documents like PAN Card, Bank Passbook
• Now verify all the details via the e-sign process, where you need to enter the Aadhar number and the OTP received on the registered mobile number.
• Once done, the account gets activated within 24 hours.

Apart from this, NSDL registered stockbrokers also offer an offline method to open a Demat account where you need to download the NSDL Demat Account opening form from the DP’s website and send it along with the copy of self-attested documents to the headquarters or nearest branch.

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CDSL Demat Account 

Next comes the CDSL depository that again performs the role and function of maintaining the Demat account of clients who open a Demat account with the registered DPs.

Opening a Demat account with the depositories makes it easier for you to secure your holdings in the Demat account. Here are some more benefits of opening a Demat account with CDSL. 

• The depository opens a unique number to each Demat account thus making it easier for clients to debit/credit shares. This is called the NSDL Demat Account Number.
• It offers a settlement facility that reduces the overall hassle of buying or selling shares. Here the securities bought or sold in any exchange are directly debited/credited to the Demat account without going through the broker’s pool account.
• It provides “EASI’, a seamless way for investors to access the holdings and the status of their transactions.

Here is the list of depository participants registered with CDSL:

1. Upstox Demat Account

After Zerodha, Upstox offers the discount brokerage plan to traders and investors that offers them an opportunity to trade at the minimum cost.

It offers the advanced trading app Upstox Pro Web 3.0 that helps its clients to pick, analyze and trade in shares across different trading segments.

To gain trading experience with the stockbroker, open a Upstox Demat account now.

2. Bajaj Finserv Demat Account

Bajaj Finserv the emerging stockbroker in the stock market, with valuable services and multiple brokerage plans has now made it possible for its clients to trade without worrying about the brokerage.

Offering the least brokerage charges across segments it has gained much fame in the shortest time.

3. Samco Demat Account

Samco is another discount broker registered with all the major stock exchanges of India thus allowing trade-in equity, commodity, currency, etc.

Also, by opening a Samco Demat account you can trade at the flat brokerage of ₹20 per trade. Grab full information about its trading app and start trading without delay.

4. Paytm Money Demat Account

The name of Paytm is already in the market, and now among many of its services, it introduces the Demat account services for stock market investors and traders.

Registered as a discount broker, it claims to offer trading services at a minimum cost. Other than this, the broker comes up with the plan of Free Demat account for a lifetime by waiving off the AMC Charges.

Reap the benefit of trading with Paytm Money by opening a Demat account now.

5. Edelweiss Demat Account

Edelweiss is a full-service stockbroker offering multiple brokerage plans where one can reap the benefit of flat brokerage fees along with other brokerage plans.

It is good to look for the Edelweiss charges and brokerage plan to choose its services.

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CDSL Demat Account Opening 

Now the opening process is almost similar to the one discussed for the NSDL depository, only the verification process differs.

So, in order to open a Demat account with the depository participant registered with CDSL, just choose the depository participant and gather all the essential documents.

Post this, follow the steps described below:

• Open the website of the respective stockbroker and click on ‘Open Demat Account’.
• Enter the basic details and on verification of the mobile number proceed further.
• Upload required documents like PAN Card, Aadhar Card, and Bank Passbook.
• In case to trade in derivatives, upload the salary slip and account statement of the last 6 months.
• Here the end step involves the e-KYC or e-sign process that can be done completely online.
• This involves the Aadhar verification.
• Post this, there is an in-person verification that is completely online.

So, choose the stockbroker and open a Demat account with the best stockbroker now.

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Demat Depository Account Charges

After knowing the opening process, let’s have a quick look at the charges involved in opening a Demat account.

Now, these charges are minimal and even there are stockbrokers imposing zero fees for opening a Demat account.

Further, there are other fees like Annual Maintenance charges. These charges are either charged per year or per month.

Also, there are DPs that do not charge any AMC charges or charge it from the second year onwards.

Let’s have a quick look at the fees of the depository participant registered with both the depositories.

Demat Depository Account Opening Charges 

The account opening charges are the one-time fees charged by depository participants to activate the Demat services. It varies and depends upon the stockbroker you choose to trade with.

Here is the detail of NSDL Demat Account Charges charged by different registered stockbrokers:

 

Apart from this, here is the CDSL demat account charges of the stockbrokers registered with the depository:

 

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Demat Depository Account Annual Charges

As discussed above, apart from the account opening charges there are annual or account maintenance charges.

These charges are charged on a monthly, quarterly, or yearly basis. Here is the detail of the AMC Charges as charged by the NSDL depository participant:

 

Now, let’s have a quick look at the AMC fees of the depository participant registered with CDSL:

 

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Depository Account vs Demat Account

Now moving towards the last segment of opening a Demat account with a depository, is which depository to choose and what is the basic difference between a depository account and a Demat account.

Moreover, it is important to understand that is there any difference between the two.

Let’s clear all your doubts by providing you with the difference or detail between the depository account and the Demat account.

Since depository account is clearly choosing the depository with whom you want to open an account. So for this let’s clear the difference between NSDL and CDSL

Let’s start with the management process of both the depositories, NSDL depository generally holds and manages the electronic shares, ETFs, bonds traded on NSE.

On the other hand, CDSL holds the BSE-traded securities.

Other than this comes who promotes both the depositories.

On one hand, where NSDL is promoted by India’s Premier Bank and other financial institutions like Industrial Development Bank of India and Unit Trusts of India.

CDSL is being promoted by BSE and the State Bank of India. Apart from this, it is promoted by other financial institutions like Bank of Baroda, HDFC Bank, Standard Chartered Bank, etc.

This is discussed in order to make it easier for you to choose the right depository to manage your Demat account. Apart from this, looking at the security, it is always good to pick the one offering high-level security to your holdings.

Recently, there was a theft of securities from the 5 crores CDSL Demat account, now this makes it, even more, choose the right depository for opening a depository Demat account.

So, a depository account is generally the depository you choose to have a Demat account.

Further, it is important to understand why Demat account is required in stock market.

Well! understanding its importance in simple terms it is generally to secure your shares in dematerialized account with any of the registered depository participants.

Make sure you pick the stockbroker registered with the depository offering better services and minimal cost of maintaining the account.

However, here again, you can get the list of stockbrokers who are registered with both depositories. Now which depository account you choose depends upon the exchange you pick to trade in.

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Conclusion

Now if you are looking forward to having a Demat account with the depository, consider all the important factors discussed above.

Here however you cannot open a Demat account with a depository but can choose the stockbroker registered with the depository with which you want to operate your demat account.

Why to wait more? Get in touch with us and we will assist you in choosing the right stockbroker and in opening a Demat account online for FREE!

 

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