If you are fond of investing and keen to understand the basic terms related to it then the Demat account is one of the most important aspects. Demat is the abbreviation for a Dematerialized account which is a term which you will be hearing frequently if you want to invest in stocks or mutual funds on Groww. In this article, let’s understand in detail what it is, how to open a Demat account on Groww, and the prerequisites.
What is a Demat Account?
A Demat Account is similar to a bank account and is used to store primarily your share certificates and other securities in an electronic format. Demat Account makes the process of holding your investments such as mutual funds, shares, bonds, government securities, and ETFs hassle-free. It makes the whole process easier by diminishing the physical handling and maintenance of paper shares and other necessary documents.
In a nutshell, it streamlines the process of share trading and thus, an investor doesn’t have to worry about storing the certificates and securities. All Demat accounts in India are managed by two organizations – National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).
What are the Charges of the Demat Account?
The charges of opening/maintaining a Demat account varies for different depository and the stockbroker and also depends on the volume held in the account, what type of account you have subscribed to. One thing which you can be sure of is Demat account opening charges are not charged by the stockbrokers but every stockbroker charges a transaction/operation fees which entails the Annual Maintenance Charge (AMC). If an investor fails to pay these fees, it might result in the freezing of the account.
How to Open a Demat Account with Groww Online and What are the charges?
As mentioned earlier, there are no Demat account opening charges levied by stockbrokers but a nominal AMC (account maintenance charges) is charged. The interesting thing about Groww is along with zero account opening charges, there are no account maintenance charges as well. Isn’t that great?
Coming to the account opening process, Groww offers an instant online account opening process to its customers. Opening an account at Groww is hassle-free, easy, and a completely paperless process that saves a lot of time.
Stepwise Process to Open Online Account with Groww
- Firstly, if you don’t have the Groww app then you can download it or simply open the Groww website.
- Sign up with an email id and mobile number and then log in to your account
- The next important step is to verify your mobile number by entering the OTP received on your number
- Once verified, you need to confirm your identity by providing the PAN no.
- Next, you need to provide basic details related to your Banks such as the account number and the IFSC code. This step is needed to debit the required money to Groww Balance in order to buy securities.
- Next, you need to verify your bank details
- Then click on complete setup under the Stocks tab
- The account opening charges are zero on Groww as mentioned; you can read about other charges by click on ‘See all charges’
- Once you are clear with all the applicable charges, click the tick to agree
- Next, click on open stocks account. This will unlock the stocks option on Groww
- Next, you need to enter some basic details such as your occupation, income, father’s name, mother’s name and click on ‘Next’ to complete the KYC process.
- Provide your trading experience from the list of values and then click on Next
- In the next step, you need to upload your signature by signing with dark ink on white paper then click the photo and upload your signature. Make sure the signature is clearly visible
- The next step is the Aadhar based e-sign. You need to e-Sign the account opening form based on your Aadhar by submitting the aadhar number to the e-sign service
- You will be receiving an OTP on the linked mobile number linked to your Aadhar
- To start, click on e-sign AOF after reading the instructions
- Provide the OTP received on the linked mobile number and then click on submit
- Read the Demat account opening form and then click on ‘Sign now’
- Next, enter your Aadhar number on the NSDL E-sign service portal and click on Send OTP button.
- Enter the OTP received to complete the account opening process.
- It takes a few hours for the account to get activated
- Once the document verification gets completed at the broker end, the account gets activated
What are the Types of Demat Accounts?
Now that you know what a Demat Account is and how to open it, let’s understand the types of Demat Account. There are three main types of Demat accounts:
Regular Demat Account: For Indian citizens who reside in India.
Repatriable Demat Account: This is for non-resident Indians (NRIs), through which they can transfer money abroad. However, to have this type of Demat Account one needs to link it to an NRE bank account.
Non-Repatriable Demat Account: This type of account is again for the NRIs, but one cannot transfer funds abroad with this type of Demat Account. Furthermore, it needs to be linked to an NRO bank account.
On a closing note
Opening a Demat account online is super easy on Groww so is the process of buying and selling. Hope that this article helped you to understand the in and out of Demat account. If yes, then you can now easily open one and start investing as investing can give you an opportunity to earn high returns in the future.