As an investment or trade in the stock market, you know well that you must have a Demat or trading account. It is the first step to participate in the stock market. As per NSDL and CDSL statistics, there are 44.46 million (Approx.) Demat account holder in India but only 10 million (Approx.) active traders. 34.46 investors/traders are inactive, which means they have not participated in share transactions for the last year. The article will cover how to close demat account. If you are one of the traders/investors who is not involved in trading or investment, you should close your Demat account. It helps you to avoid additional AMC charges for your Demat account.
Initially, opening a Demat account comes with an inclusive of all the fees and maintenance charges. These charges are the major reason you need to close a Demat account with a zero balance or inactive history. Knowing the procedure of closing a Demat is important too. If a trader or investor is no longer using the Demat account or has a zero balance in their Demat account, it will be smart to close the Demat account. Otherwise, it would be considered a dummy account. As a result, nothing but incurring maintenance fees annually will result in expenses.
You can avoid your extra expenses by closing the Demat account, and it is the legitimate way, and you will not pay an additional financial burden on AMC. It is important to know the Demat account closing, which will help when you choose to close the account.
How to Close Demat Account Online
Here are the steps on how to close Demat account online in a few easy steps.
Before we head to the process of closing the Demat account online, we need to note a few points.
● You cannot close the Demat account by making an online request for account closure via email.
● You need to submit the application in person to the concerned authority.
● This application includes a hard copy of the necessary paperwork.
● The online application form will ease the process of closing the Demat account.
Preliminary Steps to follow
Before you close a Demat account, make sure to take care of some of the few preliminary steps:
● Your Demat account should not hold any shares, and make sure there are no shares present in the account.
● Your account should hold any negative balance and always clear the balance before closing the Demat account.
● To check the details for the account balance, you can either log in to your account or contact your registered branch.
● You have to Download the Account Closure Form from the stockbroking website under the “Important Document” section.
Steps on How to Close Demat Account?
Here are steps to follow to close the demat account. Follow each step to close your demat account easily.
Fill out the Account Closure Form. ( if the demat account is shared by more than one person, all the holders need to sign the closure form in the presence of a Depository Participant (DP) official. This DP can be the brokerage firm or the bank).
You need to fill in all the details. Especially the one mentioned below before submitting your closure form:
● Your ID and the DP ID
● Fill up your KYC details like your name and address already mentioned with your records.
● It would help if you had to State the reason for closing the Demat account.
● The data should be verified and submitted by a bank official with a self-attested identity proof copy.
● Submit the unused portion of the delivery instruction booklet slip back to the DP.
You need to submit the form to the nearest branch in person. This way, the account can be either transferred or closed by an authorized signatory of the institution.
Case 2- what if there are remaining holding in the Demat account
Here are the steps you need to follow to close your account if your Demat account has some or other holdings.
● You need to fill out a delivery instruction slip (DIS). This will help transfer any of the remaining securities held in your Demat account.
● Fill in your Names and details of Demat account holders. The data should match the data registered.
● You need to submit the client master report from the central depository of the new accounts. This has to be done where the transfer is being proposed. Moreover, it should be done along with the relevant stamp, signature, and logo.
● You have to submit DIS, CML, and other necessary documents at the nearest branch or at the Depository participants’ Head Office.
In conclusion, here are the steps you need to follow if you look forward to closing your Demat account. Why pay the annual maintenance charges when you can save money. Moreover, you can contact your broker or sub-broker if you face any issues.