| Many banks are taking out there IPOs and most of | | | | better to choose a bank where you have been holding |
| you must be interested in investing money in the IPOs | | | | your savings account for long, then much of the paper |
| that are coming up. For this you first have to have a | | | | work would get simpler and documentation will not |
| "demat account". | | | | take much time, as you are already known to the |
| A demat or 'dematerialised' account holds shares in | | | | banker. |
| electronic form, thus saving you the bother of holding | | | | The Documents required opening a demat account: |
| shares in paper form. Possessing a demat account is | | | | A set of documents needed to be provided to the |
| now a prerequisite for stock market investments. | | | | agent at the time of opening account are: |
| You can open demat account in banks, financial | | | | 1. Duly completed account opening form and passport |
| institutions and stock broking houses. The broking | | | | size photos; |
| houses in such cases also act as DPs (depository | | | | 2. A copy of PAN card as proof of identity; |
| participants) intermediating between the depositories -- | | | | 3. Personalized cheque/Copy of the bank passbook |
| CDSL or NSDL and the investor. To open a demat | | | | 4. A copyof passport/voter ID/ ration card as a proof |
| account, first of all you have to submit an application to | | | | of address |
| a DP and along with it submit required documents. | | | | Signing of the DP-investor agreement. |
| Once you have a demat account to your name, you | | | | On submitting of the complete set of documents, the |
| can open a trading account with a broker of your | | | | agent will complete the other formalities with the |
| choice. | | | | depository and facilitate opening of the account. You |
| The shares bought and sold by you are reflected in | | | | will be given a unique account number (BO ID- |
| your demat account. Any previously held physical | | | | Beneficiary Owner Identity), which will serve as a |
| share can also be dematerialized and transferred to | | | | reference number for all further transactions. After |
| the account. | | | | that you, must also collect delivery instruction (DI) slips |
| The DP, at regular intervals, provides you with an | | | | from the DP. A DI slip has to be filled and sent to the |
| account statement showing the balance of shares in | | | | DP on every delivery (sale of shares) you make. DI slip |
| your demat account and transactions during a period. | | | | is an instruction to the DP to debit your account and |
| Following steps can help you open a demat account: | | | | credit the broker's account with the specific stock. |
| First of all you have to look for the institutions offering | | | | It is very important that the DI instruction should reach |
| DP services. You have two options. Either you choose | | | | the DP the very next day after the sale, failing which |
| a bank/financial institution or a stock broker who could | | | | the securities won't reach the broker and hence the |
| provide you the DP services as well. The factors that | | | | exchange. This could result in auction of the security. |
| help you in the selection should be the charges and | | | | For instance the exchange is able to procure those |
| location convenience. The fees charged for DP | | | | shares only at a higher price, and then the resultant |
| services differ across the industry. Though the rates | | | | loss has to be borne by you, as investor. If you have |
| change, the charges normally categorized under the | | | | demat account as well with your stockbroker you can |
| following heads: | | | | escape this irksome process of sending DIs, and give |
| Account openingfee | | | | him a standing instruction (POA-Power of Attorney) |
| Annual maintenancefee | | | | for delivery of stocks that you sell. |
| Transaction fee | | | | Once you constrict down on a DP and get the |
| Besides the above, depository participants also charge | | | | documents ready, opening a demat account is very |
| service tax as applicable. A bank or other DP might | | | | simple process. |
| sometimes waive the initial account opening fees. It is | | | | |