Common Mistakes to Avoid While Opening a Demat Account

It is no secret that investing in the securities market has become extremely accessible and feasible, and the adoption of dematerialisation has been central to that. Should you wish to invest in the stock market, all you need to do is open a demat account and a trading account, add funds to the account, and select the assets to invest in.

In the digital age, you can easily open a demat account online and avoid hassle and paperwork. While opening your demat account, you ought to be mindful of some potential mistakes and try to steer clear of them. In this article, we shall delve into 

• How to open a demat account in India 
• Prominent mistakes to avoid while opening a demat account 

How To Open A Demat Account Online In India 

You can open demat account with any authorised depository participant or stock broker in India. The entire process of demat account opening can be completed online. It is also possible to open a two-in-one demat and trading account. Here are the steps you need to follow to open a demat account online in India. 

1. Select a credible depository participant to open a demat account. 
2. Keep important Know Your Customer documents handy. 
3. Visit the official website of the chosen DP. 
4. Fill the online demat account opening form (or demat and trading account opening form). 
5. Submit the necessary KYC documents. 
6. Complete the step of In-person Verification online. 
7. Await the verification of the documents at the DP’s end. 

Mistakes You Must Avoid While Opening A Demat Account 

When you open a demat account, you must avoid a few common mistakes such as:

1. Not Carrying Out Sufficient Research About The Dp

It is important to carry out significant research before selecting a depository participant to open a demat account with. You can assess and compare various DPs based on their past performance, credibility, demat account features, account charges, etc. Failure to complete this step may lead to the selection of a DP that’s not right for your in terms of account features, support services, cost structure, etc. 

2. Not Checking The Schedule Of Charges For The Demat Account

Another key mistake you must refrain from is not perusing the schedule of charges for your demat account. Each demat account carries a host of charges, ranging from account opening charges to Annual Maintenance Charges and transaction charges. You must gather information about these charges from the DP before opening a demat account. 

3. Not Perusing The Features Of The Selected Demat Account Offering

Different types of demat account offerings carry varied features. While a Basic Services Demat Account offers basic demat features, a Full Service Demat Account entails a host of additional features which may vary from one DP to another. It is important to be clear about the range of features you require in your demat account. If you lack this clarity, you may not be able to choose the right demat account for yourself. 

4. Not Having The Requisite Kyc Documents Handy

Before you begin the application to open a demat account online, you must keep digital copies of certain KYC documents handy. These documents include your PAN card, a valid proof of identity, recent passport size photographs, a valid address proof, and a proof of income. For the In-person Verification process, you must keep physical copies of these documents handy. 

5. Not Completing Your Demat Account Application

Another mistake you must be mindful of is an incomplete demat account opening application. You must complete your demat account application, upload the required documents, carry out the In-person Verification process, and submit the form. Only when the entire process is complete shall your application be considered. The same holds true for opening a trading account. 

The Bottomline 

By avoiding the aforementioned mistakes, you can increase your chances of a successful demat account opening experience. It is important to peruse the correspondence received from the selected depository participant throughout the process and cooperate with them.