How To Close Demat Account

Demat or Dematerialised accounts are a great way for most people to make money on the side. For investors trading in the securities markets, it is compulsory to have an online account. But In this article, we tell you How To Close Demat Account Online Step by Step.

The number of Demat accounts in the Country is estimated by SEBI to be 44.46 million. It is only an electronic account to keep shares and securities in its most basic form. More people are trying to jump on the stock exchange bandwagon as a result of the expanding economy.

Even with such large numbers, SEBI has also revealed that over 75% of accounts are dormant. Unused Demat accounts incur annual and maintenance costs, which can be expensive. Therefore, it’s a good idea to cancel your Demat account online and prevent making any needless purchases.

How To Close Demat Account

There are two types of Demat account closures

  • Account closure: When there are no pending payments or holdings in the investors’ account, a request can be raised with the concerned depository partner(DP) to close the Demat account online.
     
  • Transfer and account closure: If there are pending securities that need to be shifted to another Demat account then the procedure is slightly different.

How To Close Demat Account Full Process

Step 1 – Download the Demat account closure form from your depository participant’s (bank or investment agency) website.

Step 2 – Then fill in the form accurately and submit it with your KYC documents. Make sure all the proofs are valid. This step involves physically submitting the forms and documents to the closest DPs office or by mailing them to the concerned head office.

Step 3 – If more than one person holds the account then both need to sign the closure form in the presence of an official from their DP.

Step 4 – Ensure that there are no shares in the account and it does not have a negative balance. This can be checked by logging into your account.

Process to close or delete a demat account in case of transferring pending holdings or shares from one Demat account to another:

Step 1 -India has two national depositories, NSDL and CDSL. In case of intra-depository transfers, an Intra DIS slip will be required and the ‘Off-Market transfer option in the Demat account must be chosen as well.

Step 2 – Then the original CML (client master list) with the logo, stamp and signatures must be acquired from the account.

Step 3 – After this, the completed form with relevant details and names of the shares you wish to transfer along with their ISINs must be mentioned. The target client will also have to be stated along with their ID which is a 16-character code.

Step 4 – Post this the documents must be submitted to your DP’s office or mail it to their head office.

Step 5 – For closure, it is also compulsory for a bank official to verify the self-attested Demat closure form.

Points To Check Before Closing a Demat Account

Before closing the Demat account, be sure you tick the following checklist: 

  • No SIPs, mutual funds, bonds, etc., are linked to your Demat account.
  • No debit balance in the account.
  • No open positions in the account.
  • No holdings in your Demat account and Trading account (Pool account). 

In case you have any mutual funds, SIPs, bonds, debit balances, open positions, or holdings in your Demat account, follow the steps below:

  • Mutual Funds and SIPs: Stop and close your mutual fund investments linked to the Demat account. If some units are lying in the pool, you can shift them to another Depository Participant (DP) account. 
  • Debit balance: Clear the debit balance and bring it down to zero.
  • Open positions: Close or square off any positions to close your Demat account. 
  • Holdings or Stocks: Sell those shares or shift them to another Demat account. 

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