With so many different options to choose from, it is very common for a trader or investor to switch between one brokerage firms to another to take advantage of lower brokerage charges and better services. But if you are planning to switch to another broker, what will you do with the shares in your current account? You can transfer them! No matter what the reason is, you can easily transfer shares from one demat account to another. In this article I will be sharing a general way to transfer your demat account from one stock broker to another easily.

What is Depository Systems?

Before talking about how you can transfer your shares, let us first try to understand how the shares are actually maintained. In India, the shares that you own are held by a depository system. There are two depositories in India-

  • Central Depository Services Limited (CDSL)
  • National Securities Depository Limited (NSDL).

Brokerage firms are associated with one of these two depositories.

How Transfer Happens Between These 2 Depository System?

The depository to which your old and new stock broker are associated with will determine the transfer method. There are two different transfer methods

  • Inter Depository Transfer- If the new and current brokers are not associated with the same depository.
  • Intra Depository Transfer- If the new and current brokers are associated with the same depository. Intra depository transfer is also known as Off Market Transfer.

Steps To Follow To Transfer the Shares from One Demat account to another Demat account

So for example, you want to transfer your shares from SBICap Securities to Sharekhan.

When you open a new demat and trading account, you get a DIS (Delivery Instruction Slip) booklet from the account provider (SBICap Securities in this case). You’ll see that most of the details are already printed by the SBICap Securities except the security details and Target DP, which will be of the new broker (Sharekhan).

In the slip, you’ll see a column for Inter Depository Transfer and another for Off Market Transfer (Intra Depository Transfer). Select one as per your transfer type.

Apart from the transfer type, you’ll be required to enter the 16-digit DP ID of your current broker and 16-digit ID of the new broker. In the ISIN column, you’ll be required to enter the unique number of the shares of the companies you own. These are 12-digit numbers which begin with IN.

Once the slip is duly filled, submit the same to your current broker. In return, you’ll receive an acknowledgment letter from the broker. Your current broker will send your request to the depository and the depository will then transfer the shares to your new account. After submitting the form, it should take 1 or 2 working days for the transfer to take place.

If you are closing the account with your current broker, the broker should not charge any fee for transferring the shares. However, if you continue to use the current demat account after the transfer, you might to required to pay a small fee for the same.

Once the transfer is completed, you should return the unused DIS slips to the current broker if you are closing the account. Apart from transferring shares between two of your own demat accounts, you can use the same steps to transfer the shares from one person to another person also. Look for the cost of transfer if any by asking your stock broker company.

Have you ever tried to transfer shares to another demat account due to heavy brokerage charges and flexibility of better trading features etc? How was the experience? Please do write a comment here and share your experience or any tips & tricks to take care while transferring stocks to another demat trading account.