In India, demat accounts are on a rising swerve for electronic investments, especially within the young adult populace. And why not?!, they definitely are a great way to have enhanced electronic financial assets. India today holds almost 4 crore demat accounts, however, on the other hand, more than 75% of those demat are dormant.
Inactive demat accounts are not a wise holding, given that the accumulated incurred charges end up with you losing money instead of benefitting from it. Alongside the financial drain, the account might end up turning out to be a liability. In case of inactivity, or you have more accounts than needed which are not required anymore, the smart thing to do would be to close the unused accounts.
While demat accounts are responsible for safeguarding the securities, there have been instances about illegal diversion of securities by fraudsters in the past. If you keep the demat account dormant, they become targets to get hacked by fraudsters. A demat account is considered dormant if there is no trading activity observed for a period of 12 months as stated by the National Stock Exchange (NSE) in its circular dated 10th February, 2020.
Before closing a demat account, there are certain points that you should know before initiating the process. For example, an in-person verification is mandatory, for both opening and closing a demat account, it is not acceptable to just do it online or via a phone call or an email. However, you can initiate the closure process online, making the process easier and quicker using your DP’s demat account closure form.
Once all the paperwork and formalities have been completed, it takes about 7 to 10 workings to close the account. There are no charges for account closing with any DP in India.
No, only the account holder or a nominee or a legal heir (in the case of a deceased person) can with valid reason and proof close a demat account.
Not at all, if all the documents are in place, with the DP’s assistance, the demat account closure is a quick and simple process.
The demat account cannot be closed online alone. It requires an online request for closure by email online via email and after filling all the details and gathering all the documents, the forms need to be sent physically.
If you do not conduct any trading activities with your demat account for a certain period of time (12 months) then it will be considered as a dormant demat account. Meaning, you won't be able to do any transactions until you reactivate it.
Yes. If you feel there is fraudulent activities going on and your stock may be exposed to theft or fraud then you can freeze your account. Once you freeze your account, the broker cannot transfer the securities out of it.
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.