Basics of Demat Account

This is another article from Zoid Research Gurukul about Demat Account, in this article you will learn what is demat account and how you may open demat account.

Demat account is one of the basic types of account which you will need if you intend to trade in the share market. To explain it in simple terms, Like a bank is for your money similarly Demat is for your shares. This account holds all of your shares in electronic or in dematerialized form. Like any other bank account, a demat account contains the certificate of the financial instruments which include shares, bonds, government securities, mutual funds and exchange traded funds etc. You need to have a demat account if you want to trade into share market. Without a Demat account, you cannot trade in to share market.

Not only you need a demat account for participating in to share market but along with that it also provides you with certain benefits such as you can conveniently hold all of your securities compared to holding them in physical form. Plus no stamp duty is imposed on the transfer of securities or shares which are held in demat form. It provides you with immediate transfer of shares or securities thereby providing you liquidity.

As you have read till now, you know that you want to invest in stock market and you need a Demat account, But how can you open it? well, the opening procedure is also very simple just keep on reading the article.


The procedure opens a demat account is very simple. it can be opened directly with the help of CDSL which means Central Depository Services (India) Ltd. And it has to be opened via or through a depository participant (DP) of CDSL

The depository is a facility which provides you with the facilities of holding your shares in a secured format and in a digital way.

You should follow the instructions which are given below in order to open a Demat account.

  • The process of opening of this account goes through a DP of CDSL which is really easy if you follow it correctly. It is very much similar to the opening an account in a bank
  • First, you need to choose your DP’s according to your preference and charges which are taken by the DP
  • Once you have chosen the DP, you need to submit completely and correctly filled account opening form in a required format along with the documents like a photocopy of your PAN card (Permanent Account Number), An address proof which can include almost anything like Aadhar card or passport and also an Identity proof.
  • After that, you will be required to sign a stamp paper agreement with your DP which include various things including rights and obligations of both investor that is, in this case, you and DP
  • One opening of a Demat account you will receive a unique identification number which you need to use in all of the future transactions may it be of any kind.
  • With the help of DP, once you have opened your Demat account in CDSL, You are allocated a unique number just like I mentioned above this number also ensures all the debit and credit securities and since each number is unique it will only be related to a particular account only.
  • The Demat account can be opened and maintained with Nil balance also


  • It is possible to open multiple accounts for a user.
  • There is no need to pay any extra charges while opening a Demat account you only need to pay the statutory charges
  • A demat account can also be opened for a single person as well as a joint account. It can have almost up to 3 users which include 1 main user and 2 joint users
  • You are not allowed to change your name for that Demat account once it is opened. It is not possible in Any case to change the name.

Demat is one of the best and secure ways to invest into shares, and the opening of this account is also very easy. and if you want to get into share market then you need to have a Demat account