Demat Account Holders in India

As a working professional, you might not want to depend only on your salary for income. So, you can look for additional income sources like freelancing jobs and stock trading. For stock investments, opening a demat account will get you started. 

At present, many citizens are turning toward stock trading to enhance their wealth. That's why the number of demat accounts is increasing by the day. You'll be surprised to know that there are more than 11 crores of active demat accounts in India! 

But why is there a sudden growth of demat accounts? This article will delve into this and related aspects of the total number of demat accounts in India. Let's begin!    

Why Do You Need A Demat Account?

The first step in entering the stock market is opening a demat account, which stands for "dematerialised account". It enables you to store your security and shares using an electronic format.

So this account will hold every investment you make in the form of Government securities, exchange-traded funds, or mutual funds. This account aims to convert share certificates into electronic formats for convenient access and storage. It automatically removes the burdens of storing physical share certificates, making their transfer easier.

In addition, you can use your shares from anywhere using the demat account. The process is more secure and prevents forgery, damage, and theft cases. That's why beginner investors in the stock market find the demat account extremely useful.

Demat accounts help you focus on selecting and trading the right stocks instead of struggling with paperwork. Just trade your shares, and they will automatically convert into an electronic form and move to the account.

Be it an experienced or newbie investor, everything can be done online through the demat account. Other benefits of opening a demat account are –

• You can use the account from your laptop or your smartphone

• Lowered transaction costs

• Seamless share tracking and transferring

• Opening and operating the account is simple

Number Of Demat Accounts in India

A few months back, the total number of demat accounts in India crossed the 100 million mark. This rapid growth is responsible for the convenience and the wide number of benefits provided by these accounts. 

Further, this growth has been observed since the global pandemic, when people started looking for alternative income sources.

Before the pandemic, there were approximately 41 million demat accounts in the country. But now, factors like economic instability, corporate layoffs, and inflation have pushed people to start investing.

Moreover, opening a demat account is not very complicated – it suits both experienced and new investors. For these reasons, more than 18 lakhs of new demat accounts opened in the past few months.

Another important factor motivating people to open demat accounts is stock brokerage support. Currently, users have many options when choosing stock brokerage firms. These include companies like Angel One, Zerodha, Motilal Oswal, ICICI Direct, Choice, and Upstox.

As these firms offer reasonable brokerage charges, investors from different financial backgrounds can come forward. Investors from Tier 2 and Tier 3 cities are also entering the stock market. The brokers also offer tech support, basic training, and help in stock selection, making investment decisions easy.

In addition, many Indian citizens are worried about the mediocre interest rates offered by most banks. The average savings account interest rate is 2.50 to 7% – it doesn’t add much to the monthly income. So, stock investments through the demat account can be an outstanding option.

Demat Account Opening Process  

If you are interested in stock investments by reading the statistics above, you might want to open a demat account. You can start by opening a regular account by selecting any Depository Participant (DP).

Firstly contact the DP online or offline to understand the account opening steps. You probably have to fill out the application form they give you for the account. 

Then, you need to submit your KYC documents, such as address proof, identity proof, bank statements, and personal information. You may need your PAN card details here.

In the next step, you need to provide bank account details like account name, IFSC code, and bank name. It will enable you to receive your earnings during trading. Then, you have to upload your picture along with the KYC documents.

Then, all the details you provided will be verified by the DP. It might be an in-person verification or an online self-verification, where you read out your details as per the instructions.

Submitting the Application Form

Before submitting the form, your DP might instruct you to e-sign the digital application. This way, the process will be smooth and fast, with less paperwork.

After completing all the associated formalities, you need to submit your form and wait for the verification process. You will be notified when the respective authorities have verified your details.

Moreover, you might have to pay an account opening fee after the account is finalised.

Lastly, the DP will send you login credentials via your registered email ID for an online account. For other accounts, the DP will guide you to kickstart your investment journey.

The Bottom Line

It's vital to understand the regulations of stock trading and demat account handling before starting. So, contact the DP whenever you need clarification on any aspect. Keep your documents ready and be prepared for any questions they might ask you.

Moreover, it is essential to select a trustworthy DP or stock brokerage for your demat account. It will make the demat account opening process convenient and subsequent trades hassle-free.