Having a Demat account is one of the major prerequisites for participating in the Indian stock market. Demat accounts are used to store your securities in a Dematerialized form and serve as a safe storage unit. Accounts are opened with either Central Depository Services Limited (CDSL) or National Securities Depository Limited (NSDL) through a depository participant (DP). You can also open a joint Demat account. In this article, we will explore the steps required to open a joint Demat account, along with the documents needed and the benefits of having a joint account.
Understanding Joint Demat Account
You can open a joint Demat account online. The following characteristics of such an account have been listed.
- A combined account can have a maximum of 3 account holders.
- In this account, one of the joint holders is the principal holder. Another joint holder or two is its secondary holder.
- Joint account holders must verify the account transactions.
- Shared account holders are not required to pay separate annual maintenance fees.
- If one joint holder passes away, the account ownership passes to the remaining joint holders. When all joint holders die, the account benefits pass to the nominee.
Steps to Open a Joint Demat Account in India
To open Demat account online, joint holders can follow the steps below:
- Choose a well-known broker such as Share India.
- Click on the open Demat account button on the broker’s website or the mobile application.
- The KYC document or any other documents that are required should be submitted. Along with that, you need to attach a copy of your PAN card and proof of address.
- DP forms must be filled out and uploaded online. Be sure to select the Demat account as joint and enter the nominee’s information carefully.
- Your Demat account credentials will be sent to your registration number & email address within two days. Make sure the details are accurate, and contact your broker if there is any issue.
Required Documents For Joint Demat Account
You will need the following documents to open a joint account:
- Passport-size photographs of all account holders
- PAN Card copies
- Proof of address – Aadhar, utility bills, passport, driving license, voter ID
- Bank account proof of the primary holder
- Cancelled cheque
- Proof of income – Bank statement, salary slip, acknowledgment of ITR
Opening a Joint Demat Account: Important Things to Know
There are a few things to know before opening a joint Demat account. These are:
- There is a maintenance charge associated with your account.
- A transaction fee will be charged for every transaction.
- There are no extra charges for transferring holdings from a Demat account to another account.
- In a Demat account, there is no minimum number of shares you must keep.
- Closing an account with DP does not incur any fees.
- Joint Demat accounts require all account holders to be involved in key transactions.
Benefits of Joint Demat Account
There are two or more individuals who have joint Demat accounts with equal rights and responsibilities. An account like this benefits those who want to invest together in the securities market. By pooling their resources, they can make joint investments.
Additionally, it provides flexibility and convenience since each account holder can access their account anywhere and make transactions. The joint Demat account also helps in estate planning since it can be passed on to the surviving account holder in the event of one account holder’s death.
In some cases, a joint account is the best way to keep track of your benefits. You can benefit from a joint account in the following ways:
- You and your partner can easily track benefits.
- Since it is shared, you can each contribute to the account and decide how to use the funds.
- A joint account allows you to invest together in a variety of opportunities. Additionally, you can easily manage your investment through the Demat account app.
Conclusion
To trade shares on the stock market, a Demat account is essential. A Demat account allows you to sell or hold different types of financial assets. Moreover, Demat accounts can be held jointly. Three individuals can open a joint Demat Account, consisting of a primary holder and two joint holders. A joint online Demat account can benefit your business, family, or other purposes. You can make an informed decision regarding opening a joint Demat account by keeping the above points in mind. Make sure to keep the documents handy so that the application process goes smoothly.