The stock markets are a clear indicator of the enormous growth seen in our economy. After understanding the dynamics of the stock market, mutual funds, and other financial instruments, several people appear more inclined to invest heavily in these markets. But can everyone participate? They can only do so if they have a dematerialized account.forex markets
Criteria for Eligibility
Some criteria that are to be covered to make a Demat account are as follows:
There is no age limit for investing in the stock market. Both adults and minors can buy stocks. After submitting the necessary paperwork, parents or a designated guardian may open an account in a minor’s name. The account will be managed by the minor’s parents or guardian(s) until the minor reaches the age of majority. After the minor turns 18, the depository participant will notify the person requesting specific KYC (Know Your Client) documents to open and transfer information to a new account.
PAN and KYC information
To open a trading account, you must first obtain a PAN card. While opening the account, you must submit a copy of your PAN card and the KYC document.
The KYC process is shifting to an online format that uses your Aadhaar card. It is the most popular method of registration on Upstox. You, too, can complete your e-KYC online.
Documents needed to open a Demat account:
You need to provide your PAN card, a few additional identification and address proofs, and your most recent photos to be eligible for a dematerialized account. Documents must be only in photocopies. The originals, however, will be required for verification.
Identification proof (POI)
A voter’s ID, a PAN card, a passport, a driver’s license, electricity and phone bills, and ID cards with the applicant’s photo issued by the federal or state governments, are a few examples of documents submitted as identification proof.
POA (Proof of Address)
Ration cards, passports, a voter ID card, a driver’s license, a bank passbook or a bank statement, verified copies of electricity bills, and residential telephone bills are just a few documents used to prove your address.
Proof of income
Six months of bank statements and a net worth certificate, Salary slips for three months, income tax return statements, and holding reports.
A cancelled check, passbook, and bank account statement for the previous six months
White paper signature
Sign on a blank sheet of white paper and scan it to upload as a pdf. The sign should correspond to the one on your pan card, and One passport-sized photograph is required.
How Does a Demat Account Function?
A dematerialization account stores all of your securities (stocks, commodities, ETFs, and so on) electronically. You can’t trade stocks if you don’t have one. Let’s start with the fundamentals. Here’s a checklist to help you understand how this account works:
Depository Central: Two depositories in India hold your stock accounts for you. These are the CDSL (Central Depository Services Limited) and the NSDL (National Securities Depository Limited) (National Securities Depository Limited).
Identical ID: A unique ID identifies every dematerialized account. This number is not only used for transactions, but it also assists individual companies in correctly identifying you to credit shares to your account.
Depository Participants (DP): Depository Participants (DP) or brokers can provide access to the central depository’s stock account. They serve as a liaison between the collection point and the investor. Traditional banks, financial institutions, and discount brokers all have the potential to be DPS.
Portfolio Holding: A stock holding account records all of the account’s transactions. They are automatically updated whenever a transaction takes place.
Therefore covered above were the eligibility criteria required to open a trading account online.