How To Open A Free Demat Account in India

Are you looking to invest in stock market? Do you know that return from share market is highest compared to any other investment in India if you compare the history of last few years. Do you know that you need a stock trading account or demat account to start investing in share market? Can I open a demat account for free of cost in India? Opening a Demat account in India requires some proper steps that need to be taken by you. This article provides with all the right and useful information in the best way.

Do I need a demat account to invest in Mutual funds / Stocks / IPOs?

If you are looking forward to buying or sell stocks, then it is mandatory to have a Demat account. Well, just like you need to have a bank account for savings and transactions, you need to open a demat account to hold stocks, investments, debentures, and securities. It does not matter whether you wish to buy stocks online or offline, it is crucial to make sure of creating a demat account for yourself.

At the same time, you need to take some necessary steps to open a demat account in India. In this article I will be sharing various information related to demat account opening process in India. You can read various other articles on my website related to how to buy IPO through your demat account, how to buy mutual fund etc.

Which is the best bank to open demat account?

If you are looking for free demat account, then there are various banks like HDFC Bank and Axis Bank who don’t charge for opening demat account. In fact bank also provide 3-in-1 Demat Account & trading account. Besides that there are various other banks who are providing such account.

If you are looking for best banks that can provide 3 in 1 demat account services compared to others, then these banks are good to consider.

  • ICICI Bank, ICICI Direct
  • HDFC Bank, HDFC Securities
  • Kotak Bank, Kotak Securities

Documents required to open Demat account in India

To open a Demat account in India, you need the following documents:

  • Address Proof
  • Two passport size photos
  • Photocopy of Pan Card
  • Cancelled Cheque

Thus once you are able to provide with the documents mentioned above, your Demat account would get ready for your first trade.

Steps to open a Demat account Online

Let us have a look at the necessary steps to open a Demat account in the right way:

  • Step 1: You need first to select your depository participant
  • Step 2: Next, you have to fill up the form along with attaching the necessary documents that are needed
  • Step 3: Now you need to submit your form accompanying the documents. Here you would have to sign an agreement with a depository Make sure of keeping your Pan Card ready as this is needed for opening an account.
  • Step 4: The employee of the depository participant would verify all your details in person.
  • Step 5: The final step is receiving the account number and details by the depository participant

Benefits of demat account – Advantages & Disadvantages

With the help of paperless transactions, the Demat account has made it possible in making life a lot simpler that in turn helps in getting rid off all types of manual processes. So when it comes to its benefits, you can find yourself on a much better as well as profitable side.

  • Auto update: It is important to know that you do not have to submit your Demat account details now and then. This is because your account gets automatically shared with third parties. Thus it becomes hassle-free for you to transact in bonds, shares, and mutual fund.
  • Common account: You do not have to worry at all even when you seem to have multiple trading accounts as well as bank accounts. This is because shares get deposited in the best way to your common Demat account.
  • Affordable: There is no reason to pay any charges related to stamp duty and registration. So this becomes quite affordable to you in the right manner.
  • Safe and secure: There are no chances of getting any wrong deliveries, duplicate shares, theft, etc. as it proves to be much safer as well as secured. This helps in making it possible to save much of your time because of paperless transactions. 

Disadvantages of having a Demat account

Well, I would say there is no such disadvantages. But if you are addicted to trading, then off-course you may end up loosing huge money and the addiction may cost you more. Besides that there is a annual maintenance charge applicable for almost every demat account that you have to pay whether you trade or not.

Demat Account Fees & Charges

In order to open a Demat account, you need to pay a fixed annual fee that happens to be the annual maintenance charge. It is important to note that some depository participants charges a fee for account opening. Some other providers do not charge any extra fees that help to get rid of burning a hole in your pocket. You also need to pay a fixed fee per transaction as well.

There are various brokerage called discount brokers, who are offering very low cost demat accounts. E.g. if you open demat account in Zerodha, then you will pay very less brokerage.

Tips To Open Demat Account in India

Some tips would prove to be quite useful to you when you choose to opt for Demat account trading.

  • Make sure of researching in the best way so as to find the perfect as well as a qualified depository participant. This would prove to be much useful to you where it would lead to stay yourself on a much advantageous position as well.
  • You should never make a mistake to disclose your username and password of your Demat account. It is vital to take proper steps in securing your account in the right manner.

So, get ready to buy and sell stocks and shares once you open a Demat account in India. Spend some time to analyse various banks and their demat account services, charges compare the same with other brokerage houses to find out the best. If you are opening Demat account in bank, then its recommended to get the best 3-in-1 Demat Account and Trading Account. Share your experience or any query related to free demat account opening process in India here by writing a simple comment below.


I am a passionate blogger and personal finance enthusiast. Mostly share about investment tips, insurance guide, banking how to guides and various personal finance hacks through my blog. Checkout my first YouTube Channel on Personal Finance Guide.

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