Eligibility Criteria and Documents Required to open Demat Account
The first step in your investing and trading journey is opening a demat account. It holds all your securities (stocks, bonds, mutual funds, etc.) in a single consolidated electronic format.
If you’re a new investor, understanding the prerequisites and eligibility criteria for a demat account is crucial.
So, let’s start with the basics.
Who is Eligible to Open a Demat account?
The entities below are eligible to open a demat account.
- Individual Retail Investors aged 18 years and above.
- Minors with a PAN card can also open a demat account under the supervision of a guardian.*
- Non-Resident Indians (NRIs)*
- Hindustan Undivided Family (HUFs)
- Corporate Demat Account for
- Partnership Firms,
- Limited Liability Partnerships (LLPs),
- Public Limited Companies
- Private Limited Companies,
- Trusts, Societies, and Partnerships.
*Disclaimer: Groww, at present, does not facilitate Demat Account opening for NRIs and Minors.
Documents Required To Open a Demat Account
As per SEBI guidelines, the documents below are required for the demat account opening process.
-
Identity Proof
- PAN card (mandatory)
- For NRIs, a Portfolio Investment Scheme (PIS) permission letter is required from the Reserve Bank of India, and the Demat account must be linked to an NRE/NRO bank account.
- For companies, a Certificate of Incorporation, Memorandum of Association (MoA), and Articles of Association (AoA) are required.
- Voter ID
- Driving License
- Passport
- Aadhaar Card
- Any valid identity card issued by Central or State Government
-
Address Proof
- Voter ID Card
- Driving License
- Aadhaar Card
- Passport
- Ration Card
- Bank account statement or
- passbook
- Utility bill (electricity, water, gas, or telephone)
-
Income Proof (For those who want to trade in Derivatives – F&O/ Commodities/ Currency)
- Last 6 months' bank account statement
- Current Salary Slips/ Form 16
- ITR Acknowledgement Copy
- Demat holdings statement
- Net-worth Certificate copy
- Cancelled cheque or bank passbook for bank account proof.
Common Questions Regarding Eligibility Criteria For Demat Account
1. How can I open a demat account?
You can open a demat account online via
- SEBI-registered depository participant/stockbroker,
- NSDL (National Securities Depository Limited),
- CDSL (Central Depository Services), or
- Financial institutions, like banks.
2. Is there any minimum age requirement for opening a demat account?
No, there is no minimum age requirement for opening a demat account. However, if it is a minor's demat account, it must be operated by a guardian until the minor turns 18.
3. Can I open a joint Demat account?
Yes, a demat account can be opened with joint holders. However, a minor cannot be a joint holder in a demat account.
4. What happens if I do not provide nominee details?
If nominee details are not provided, transferring securities in the event of the account holder's demise will become complex and time-consuming.
Read more: How to Know Your Demat Account Number?