Joint Demat Account: Meaning & Steps To Open Joint Demat Account Online

Mutual funds

Are you thinking about investing in the securities market?

A Demat account is a must for this purpose, which would allow you to hold financial securities like stocks in electronic form. You can also opt for opening a joint Demat account to avoid paying separate account maintenance charges. 

Go through the following sections to get insight into the intricacies of a Demat account.

Steps to Open a Joint Demat Account Online

Opening a joint Demat account online is exceptionally convenient. You simply need to follow these steps:

Step 1: To open a Demat account, you need to approach a Depository Participant (DP). You can also choose to open a Demat account via your bank or any stock broking agency.

Step 2: Download the Demat application form from the website of DP. At this time, prepare yourself by keeping your PAN, identity proof and address proof handy.

Step 3: Next, fill in the application form with all relevant details and add a signature of yours. 

Step 4: Upload the necessary documents and wait for the approval.

After successful verification, you will receive the credentials to log in to your Demat account. While filling out the form, you must make sure to select the type of Demat account you want to create (such as joint or single).

Also Read: International Mutual Funds

Documents Required to Open a Joint Demat Account Online

Here’s a checklist of the essential documents required to open a Demat account in India:

• Proof of identity – Voter ID, driving licence, Aadhaar card, etc.
• Proof of address – Voter ID, passport, ration card, Aadhaar card, etc.
• Income proof – Copy of ITR acknowledgement
• Cancelled cheque
• PAN card
• Passport size photographs

Apart from these documents, the Depository Participant may ask you for additional documents to commence trading.

Benefits of Opening a Joint Demat Account

In the case of a joint Demat account, a maximum of three account holders are allowed. Meaning, there can be one primary holder and two joint holders. 

The primary benefits of opting for a joint Demat account are as follows:

• If you have 3-4 Demat accounts for each family member, you will have to pay maintenance charges for each account. With a joint Demat account, you will only have to pay annual charges for one single account.
• A Demat account allows you to conduct trading activities in the Indian stock market. 
• The Ministry of Corporate Affairs made it mandatory for unlisted public companies to issue securities in dematerialised form. This is a convenient way to hold securities rather than keeping them in physical form.
• A Demat account eliminates risks related to theft, delays, interceptions and certificate misuses.
• You can transfer any number of securities with just one delivery instruction. This eliminates the need for tedious paperwork.
• It facilitates immediate credit for non-allotment in rights issues, IPOs and bonuses.
• Investors can access and monitor their holding status by logging into their Demat account. 

Also Read: Overnight Mutual Funds

Things to Remember While Opening a Joint Demat Account

There are a few things that you should keep in your mind while opening a Demat account. They are as follows:

• You have to pay a maintenance charge for your account.
• With every transaction, you will have to pay a transaction fee.
• You can easily transfer your holdings in a Demat account to another account without paying extra charges.
• There is no minimum number of shares that you are entitled to keep in your Demat account.
• There are no charges for closing the DP account.
• For a joint Demat account, the involvement of all account holders is essential in key transactions.
• You cannot rectify, change or delete the account holders’ names. If you want to do so, you will have to open a new Demat account.
• If a joint account holder dies, the ownership of the account will automatically shift to the remaining account holders. In case of the death of all account holders, the nominee will receive the benefits.

Final Word

Keeping the above points in mind will help you make an informed decision regarding the opening of a joint Demat account according to your needs. Ensure to keep the documents handy to experience a hassle-free application process.

Frequently Asked Questions

1. Why are my bank details needed while opening a Demat account?

This is basically a security measure. The interest or dividend warrants will be issued in the BOs name so that no one can misuse them. In addition, as per SEBI, all listed companies must use an electronic payment system for interest or dividend distribution. 

2. Can a minor open a Demat account?

Yes, a minor can open a Demat account. However, in this case, the account will fall under the complete management of the guardian until the minor reaches the age of 18. The guardian needs to be the minor’s father or mother. In case of the absence of both, a guardian can be appointed by the court. 

3. Can I modify my Demat account?

Yes, you can easily modify your Demat account by filling out an account modification form. You will have to sign this and submit it along with the necessary documents to the DP. After that, the DP will verify your details and modify the same in the system.

4. How can an NRI open a Demat account?

An NRI can open a Demat account through a Depository Participant or CDSL. However, here the Non-Resident Indian will have to mention the type (NRI or Resident) and also the sub-type (Non-Repatriable or Repatriable) in the application form.

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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.