If you are planning to start investing in the stock market, the first step in your investment and trading journey is to open a demat account. In this account, all your securities (stocks, bonds, mutual funds, etc.) are stored in a single, integrated electronic format. New investors need to understand the necessary conditions and eligibility criteria for opening a demat account, as it comes with its terms and conditions.

Who is Eligible to Open a Demat Account?

According to Groww, individual retail investors who are 18 years or older can open a demat account. Minors with a PAN card can also open a demat account, but it must be under the supervision of a guardian. In addition, non-resident Indians (NRIs), Hindu Undivided Families (HUFs), partnership firms, limited liability partnerships (LLPs), public and private limited companies, trusts, and societies are also eligible to open demat accounts.

Benefits of a Demat Account

  1. No Physical Paperwork – A demat account removes the need for physical documents, making it easier to track investments.
  2. Automatic Updates – It updates details like stock splits, bonus issues, and rights shares automatically.
  3. Easy Online Trading – A demat account allows seamless online trading of shares.

Types of Demat Accounts

  • Regular Demat Account – For Indian residents.
  • Repatriable Demat Account – For Non-Resident Indians (NRIs) who want to transfer funds abroad.
  • Non-Repatriable Demat Account – For NRIs, the funds cannot be transferred abroad.

Required Documents for Opening a Demat Account

For All Investors:

  • PAN card (mandatory)
  • Aadhaar card
  • Voter ID
  • Driving License
  • Passport
  • Ration Card
  • Utility Bill (Electricity, Water, Gas, or Telephone)
  • Bank Account Statement or Passbook
  • Salary Slip/Form 16
  • Copy of ITR Receipt
  • Cancelled cheque or Bank Passbook for bank account proof

For NRIs:

  • Portfolio Investment Scheme (PIS) Permission Letter from the Reserve Bank of India
  • The Demat account must be linked to an NRE/NRO bank account.

For Companies:

  1. Certificate of Incorporation
  2. Memorandum of Association (MOA)
  3. Articles of Association (AOA)

Other Supporting Documents:

  • Bank Account Statement (last 6 months)
  • Demat Holdings Details
  • Net-worth Certificate Copy