A demat account and trading account are required to invest in the stock market. However, to open these accounts, you will need to submit an application form along with some required documents. The documents are required to validate your identity, address, and income. You will also need to submit proof to validate the bank account to link it with your trading and demat account. The full list of documents required to open a trading account along with demat account is given below.
Proof of Identity
The following documents can be submitted to validate your identity:
- Aadhaar Card or Voter ID or Passport or Driving Licence
- Submitting a PAN card is mandatory
- Any other identity card that has the applicant’s photograph and signature. It can submit if it is issued by the state or central government.
- Identity cards issued by colleges, public financial institutions, PSUs, and other recognized professional departments. and bodies are also accepted as valid identity proof.
Proof of Address
The following documents can be submitted to validate your address:
- Rent Agreement or Registered Sales or lease deed or Passport or Voter ID or Ration Card
- Electricity bills, gas bills, landline bills, and other utility bills can also be submitted as proof of address.
- A bank passbook or account statement that is no older than 3 months is also accepted as valid address proof.
- Address proof issued by Notary Public, Gazetted Officer, MLA or MP, and bank manager of a Scheduled Commercial, Multinational, or Scheduled Co-operative banks can be accepted as valid address proof.
Proof Of Income
The following documents can be submitted to validate your income:
- Copy of ITR (Income Tax Returns) acknowledgment that you have provided to the Income Tax Department.
- Annual Accounts copy audited and verified by a CA (Chartered Accountant).
- A certificate of net worth that is issued by a CA.
- Salary slip or Form 16
- Account holding statement of a demat account with a DP (Depository Participant)
- Last 6 months’ bank account statement showing your income
Bank Account Proof
To validate your bank account, you can submit the bank statement of that particular bank along with a canceled cheque that is duly signed by you.
Once you submit all these documents, you will receive the beneficiary owner i.e. BO Id once the brokerage firm completes the verification process. You can log in to your demat account by using your login credentials. After that, you can start investing in different securities online. Though it is mandatory to submit a PAN Card to open a demat account along with a trading account, there are few exceptions to it. For example, on investing on behalf of an insurance company that is registered with IRDA or on the behalf of SCB i.e. Scheduled Commercial Banks, you don’t have to attach a copy of the PAN Card along with the set of other documents. The people who live in the Sikkim state are also exempted from submitting the PAN Card.
Also, it is not necessary to submit a separate set of documents for the trading account and demat account as most brokers offer a 2-in-1 account these days. Therefore, both these accounts can be opened simultaneously which saves your time and effort. Also, the account opening and document verification processes can be completed online these days. Therefore, you don’t have to visit any branch office or mutual fund house to open an online trading account and demat account.
Open trading account
Recently, online trading has gained immense popularity, especially amongst millennials. The primary reason for this is the ease of opening a Demat and Trading account.
Today, individuals cannot think of investing in the stock market unless they open a Demat and a trading account.
A trading account is a type of account that accommodates the trading of stocks, futures, and options, i.e., it helps investors buy and sell financial securities.
To open a trading account, individuals will require a broker. Individuals are advised to research different brokers and opt for the one who offers them the most favorable deal.
The process to open a trading account is as follows:
- Individuals first need to visit the stockbroker’s website to access the online trading account opening form. There may be the same application to open Demat and trading accounts together.
- The applicant has to verify their mobile number for the trading account opening form by filling the OTP sent on their Aadhaar linked mobile number.
- To move further with the application process, enter personal details such as name, PAN number, city, etc.
- Now, the individual has to upload soft copies of the KYC documents. Enter the details of the bank account also as it is to be linked with your trading account. Submit the application. The broker will go through the details entered and uploaded documents to check the authenticity.
- Further, the individual will have to complete the In-Person Verification. In this, they have to record a 30 seconds video to verify their identity. Stockbrokers may ask for a video call also as per its demat and trading account opening process.
- Your trading account will be opened. Access the account with your login credentials provided by the broker.
Individuals can open a free trading account and trade at one of the lowest brokerage rates with trusted discount brokerage houses.