The Gen-Z is fortunate to have been living and maturing in an era when financial literacy is rising above from a mere popular lingo and becoming a reality embraced by all. But amidst the din, it is easy to feel a little lost about the seemingly-heavy terminologies like securities, Demat account, SIPs etc., simply because formal education syllabi leave us gravely handicapped as far as basic financial know-how is concerned. So whether you are preparing to begin on the journey of personal finance or planning to take up Finance as an elective in college; starting off with the basics is always the best idea.
The first step towards becoming an investor is opening a Demat account. Short for de-materialised, a Demat is very similar to your bank account; it holds your shares and securities much like the latter that holds your savings or liquid funds. It is a repository of all the investments an individual makes; shares, securities, exchange-traded funds (ETFs), bonds and mutual funds (MFs). In India, the Securities and Exchange Board (SEBI) has laid out the rules for opening a Demat a/c. The procedure is quite simple, can be completed online, and requires the user to submit some documents as various proofs. Before we head out towards the list of necessary documents, there are some things to know beforehand. As per SEBI mandate, two agencies (or as they are called technically, depositories) namely NSDL and CDSL provide free Demat account services. Intermediaries – banks or stockbrokers – called Depository Participants (DPs) facilitate these services.
Documents admissible as Demat account proof of address include:
You can also open a demat account holder for minors with TradeSmart. But in this case, the minor will be the sole holder of the account, meaning no joint holders or nominees can be appointed. Only the minor’s father or mother can be considered a guardian. In case the relationship is not parental, then a guardian can be appointed by a court order. The account can only be operated by the parent or the legal guardian. Here is a list of documents needed for minors.
Along with the other documents you will also need to sign agreement papers like the Power of Attorney (POA) given to the broker for transfer of securities to settle margins, for settlement of trades and transfer of funds from your account. It is a way of legally letting your DP take financial actions on your behalf, of course, subject to your approval. The thing to be remembered here is that one, the POA document should have your Demat and bank account details and, two, it must be given out in the name of the broker / DP and not in the name of the employee concerned.
The documents need to be attested by any among the following.
Even in such cases, sufficient documentary evidence in support of such claims for exemptions is collected.
Since everything is online now, the procedure is more or less the same across DPs and platforms, and so is the document list necessary. Some DPs can ask you for additional certificates as identity, address, and income proof. Once all the documents are submitted, verified, and checked by the departments concerned, your DP will open your account after which you can commence trading.
Yes. Though there are some exceptions (as elaborated earlier), PAN is necessary for opening a Demat account.
As long as your PAN Card has a valid photograph, it suffices as a proof of identity.
Yes, if it has your photograph. If it has your permanent address as well, then it can also be used as proof of address. Same goes for Passport.
No, it is not mandatory.
No. While DL qualifies as a proof of identity, it cannot furnish proof of address. Hence additional documents are needed.
Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.
Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.
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Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.