Why DEMAT Account is Required for Investing? The most important reason is transaction ease. Most of the securities are available in DEMAT format now. It is easy to buy & sell if you have a DEMAT account. Some securities like shares, NCDs are compulsory to be bought through a DEMAT account. Here is an Infographic conveying requirements, details & features of DEMAT account.

What is a DEMAT Account?

Dematerialization or Demat is an electronic form of keeping various securities, such as shares, debentures, bonds, mutual funds, government securities, sovereign gold bonds, etc.

This is an alternate and efficient way of holding and transacting in securities than physical or paper form. To keep your securities in electronic form, you need to have an account with a depository. Such an account is known as the Depository or Demat account.

NSDL & CDSL are depositories in India, registered with SEBI which enables investors to have a Depository or
Demat account through its agents, known as ‘Depository Participant’ or DP in short.

We have already written some post on DEMAT Accounts & its Operations –

DO & Dont’s of DEMAT account

How to open a DEMAT account

How to Transact MFs in DEMAT form

Here is Why DEMAT Account is Required – Infographic

How can I transfer all my assets from one demat account to another?

As opening of a demat account with a particular DP is your choice, continuance of the same is too. In case you are not satisfied with your DP or for any other reason you wish to transfer your holdings to a different demat account, you can do so any time.

The procedure for doing so is mentioned below –

1. Submit a written and duly signed request in the prescribed format (Account Closure Form) to your DP with whom you are holding the demat account.
2. In the form, mention the details of another demat account where you want your holdings to be transferred (that is DP name, DP ID and Client ID).
3. If there are any charges to be paid to your DP in respect of services availed, the same should be paid. If you have paid annual account maintenance charges in advance to your DP, you are entitled for a proportionate refund for the balance quarters.
4. As per SEBI’s guidelines, if you instruct your DP to transfer all your holdings in another account of yours and close the first account immediately, then no charges for transfer and closure should be levied by the DP. Please note that this benefit is available only if both accounts belong to the same holder(s) on the basis of PAN.
5. If there is any security in your account that is not available for transfer for any reason (such as under lock-in or pledged), your first account cannot be closed till such reason exists.