A demat account holds your shares, ETFs, bonds, mutual fund units and government securities in electronic form, much like a bank account holds money. All demat accounts in India are regulated by SEBI and held with either NSDL or CDSL. You need one, linked to a trading account and a bank account, to invest in the Indian stock market.
Full form: Dematerialised Account (demat = converting physical share certificates into electronic form).
Details Guide
| Item | Details |
|---|---|
| Full form | Dematerialised Account |
| Regulator | SEBI |
| Depositories | NSDL, CDSL |
| Holds | Stocks, ETFs, bonds, G-Secs, SGBs, mutual fund units, REITs/InvITs |
| Needs alongside it | Trading account + bank account in your name |
| Key documents | PAN, Aadhaar (mobile-linked), bank proof, signature, photo; income proof for F&O |
| Opening time | Usually 1-3 working days online (e-KYC) |
| Joint holders | Up to 3 |
| Nominee | Up to 3 nominees |
| Charges to watch | Opening fee, AMC, debit/transaction charges, pledge, DP charges |
What a demat account is used for
- Buying and holding shares, ETFs, bonds and IPO allotments
- Receiving dividends, bonus shares and stock splits automatically
- Selling holdings, with delivery settled electronically
- Pledging securities to get margin or a loan against shares
- Holding Sovereign Gold Bonds and G-Secs
- Eliminating risks of physical certificates (theft, forgery, damage)
Which bank/broker is best?
There’s no single best. It depends on how you invest.
- Low cost, active investing: a discount broker (Zerodha, Groww, Upstox, Angel One, etc.) usually costs far less than banks.
- Convenience and one-click banking: bank-backed brokers (HDFC Securities, ICICI Direct, Kotak Securities, Axis Direct, SBI Securities) offer a 3-in-1 account (savings + demat + trading). They typically charge higher brokerage.
- What to compare: AMC, delivery and intraday brokerage, app quality, customer support, bank-linking ease, and any “free” offers that lapse after year one.
If you mainly buy and hold, a discount broker with zero delivery brokerage is generally the cheaper choice. If you want everything under one bank login and don’t mind higher fees, a bank-backed account is fine.
How to open a demat account?
- Choose a broker (DP) and download its app or visit its website.
- Enter mobile number and email, and verify with OTP.
- Enter PAN and complete e-KYC with Aadhaar (OTP or DigiLocker).
- Link your bank account (IFSC/UPI verification).
- Upload signature and a photo or selfie, and complete the in-person video verification if asked.
- Select segments (equity, F&O, commodity) and upload income proof if you want F&O.
- E-sign the application with Aadhaar OTP.
- Wait for approval, then receive your login details by email/SMS.
You need a bank account in your own name, and you can complete the whole process on a mobile app.
Types of demat accounts
- Regular demat account: standard account for resident individuals.
- BSDA (Basic Services Demat Account): low-cost option for small investors with one demat account per PAN. It applies automatically if you have only one demat account per PAN and holdings of up to ₹10 lakh.
- Repatriable NRI account: for NRIs who want to move funds abroad (linked to an NRE account).
- Non-repatriable NRI account: linked to an NRO account, with no free repatriation.
- Minor demat account: opened by a guardian for a child.
- Joint demat account: with up to three holders.
- Corporate/HUF/partnership accounts for entities.
Is a demat account free?
Partly. Opening is often free, but ongoing charges can apply. For Zerodha specifically:
- Online account opening is free.
- There is no AMC for the first year on new resident individual accounts opened from 1 June 2026.
- From the second year, BSDA accounts pay nothing for holdings up to ₹4 lakh and ₹100 a year for ₹4-10 lakh; non-BSDA accounts pay ₹300 a year plus GST.
- A secondary demat account is charged ₹300 + 18% GST annually separately, and multiple accounts disqualify you from BSDA.
Other brokers differ, so check their charge sheet. Also look at brokerage, DP charges per sale (debit), and any pledge or account-closure fees.
Zerodha demat account
Zerodha is India’s largest discount broker. Its account is a combined demat and trading account (Kite app and web).
- Opening: free, fully online, available via the Kite mobile app on Android and iOS.
- Brokerage: ₹0 on equity delivery and direct mutual funds, and ₹20 per trade for intraday and F&O.
- Holding value: it uses CDSL as the depository.
- Worth knowing: it doesn’t offer a 3-in-1 bank account, so you fund the account through a UPI/net-banking link.
How to log in demat account?
Zerodha Kite:
- Open the Kite app or kite.zerodha.com.
- Enter your User ID and password.
- Enter the 6-digit TOTP from your authenticator app (or the 2FA PIN).
- To see holdings and reports, log in to Console (console.zerodha.com) with the same credentials.
Any demat account: log in through your broker’s app or website. You can also view holdings via the depository portals (CDSL’s easi/CDSL Easiest or NSDL’s IDeAS) after registering with your BO ID and PAN. If you forget your password, use “Forgot password” with your User ID, PAN and OTP.
FAQ
Can I open a demat account without a trading account?
Yes, but you can’t trade without one. Most brokers open both together.
Do I need a bank account?
Yes, in your own name. Joint accounts need matching holder details.
Can I have more than one demat account?
Yes, but each may carry its own AMC, and you lose BSDA eligibility.
How long does opening take?
Usually a few working days with e-KYC.
Is my money safe in a demat account?
Securities are held at the depository (NSDL/CDSL) in your name, not the broker’s, and are protected by SEBI rules.
Can NRIs open a demat account?
Yes, via repatriable (NRE) or non-repatriable (NRO) accounts with extra KYC documents.
Can a minor have a demat account?
Yes, through a guardian. Zerodha’s blog says minor accounts have zero AMC.
What if I don’t use my demat account?
It may become dormant; you can usually reactivate it with a request and KYC check.
Can I transfer shares between demat accounts?
Yes, using an off-market transfer (DIS slip or online). Charges may apply.
How do I close a demat account?
Clear all holdings and dues, then submit a closure request through your broker.
Not: Charges change often, so confirm the current schedule on the broker’s own website before you open an account. This is general information, not investment advice.