A Demat account is an electronic or digital method made for the transaction of credit or debit of the share. In short, the Demat account is a necessary account for the transaction of shares. The Demat account was made to permanently store the credit and debit processes.
To buy and sell shares in the share market, a Demat account is very necessary. A Demat account is made mandatory for all of the people who want to buy and sell shares.
In the past, there were no permanent papers and accounts as the papers and the certificates used to get lost. So dematerialization started to permanently store the account and transactions digitally.
Essential Documents to Open DEMAT Account
You will have to visit a nearby bank or company to open your Demat account. There are some required essentials for opening a Demat account. Without these requirements, you cannot open a Demat account. For opening the account you will need the following essentials:
- A citizenship photocopy.
- Two photos (passport size).
For minors, as they are under the age of 18 and have no citizenship card, their parents or guardians can volunteer for the opening of the Demat account. The following essentials are required for a minor:
- Birth certificate
- Two photos (passport size)
STEPS IN OPENING DEMAT ACCOUNT:
1. Select DP (Depository Participant)
The first step in opening the Demat account is selecting the Depository Participant. You have to find out where you are going to fill up the form. You can choose anyone like commercial banks, institutions, or stockbrokers who serves the Depository Participant. Generally, you can choose a DP which is near your home, or else the bank on which you have your account may be good for the Depository Participant. Creating a DP with a bank is much better as it provides much more services and facilities than the other places.
2. Form ( Fill and submit)
When you will select the DP, the bank will provide you a Demat form which should be filled out. The form contains all the necessary general information about you and your family. Fill up the form very carefully as you will have to visit the bank again and again if a small error occurs.
While submitting the form, you need to have a citizenship photocopy and passport-size photo pasted in your form which will prove you are a Nepalese citizen. For those below 18 years, as mentioned earlier, you will only need a birth certificate and photos.
Also, you need to pay some amount while submitting the form. Rs. 50 is enough for opening the form but you will need to pay Rs. 100 for operating charge. So, in total have to pay Rs. 150 as a fee for opening the Demat. You will also have to renew the account by paying Rs. 100 each year.
3. Mero share:
While opening the Demat form, you can also check out the Mero share account which will help you to make transactions for the shares. With Mero shares, you can buy and sell the shares online. But you need to pay extra Rs. 50 for opening a Mero share account.
4. Receive BOID:
Now when you have submitted all of your documents and forms, after 7-15 days you will receive a BOID number in your mobile phone through SMS. The BOID is 16 digits and is very distinctive from other numbers. Once, you have received your BOID via SMS, congratulations your Demat account has been operated.
How to open demat account online?
To open your Demat account online, you have to search the bank on which you have your bank account. For example, if you have an account in NIC Asia bank, search NIC Asia Demat account on Google. If you have other bank accounts, open the Bank’s demat website from Google. Then follow the following steps:
- If you are applying from NIC Asia bank, once you open your website, click on “click here to apply”.
- A new page will open which will tell you all the requirements and details you need while opening the Demat account.
- Click on sign up.
- Enter your email address.
- Click on next.
- A verification code will be sent to your email address. Enter the confirmation code.
- Enter your full name.
- Make your password and enter it. Tick on the terms and conditions and press on the next option.
- log in to your account again.
- Fill up all the necessary details in the form.
- Upload all the personal documents like citizenship certificate, photos, thumbprint, signature, and location. You can upload this information by clicking the photos.
- Click on I agree to open my Demat account to accept the terms and conditions.
- Within 15 days, you will have to visit the bank with your original citizenship certificate.
You can fill up the form for other bank accounts similar to these steps.
A Demat account is very important for interactions in any stock market. Making a Demat account is not so hard if you follow these simple steps. You can use Mero share to apply for IPO from home. A Demat account is compulsory for the transaction of shares in Nepal. So don’t lose any time and create your Demat account.
FREQUENTLY ASKED QUESTIONS
How much does it cost to open the Demat account?
It costs Rs. 150 in total to open the Demat account. You will have to renew the account for which you will have to pay Rs. 100 yearly.
Can you open Demat account online?
Yes, the new technologies have made the Demat account available even online as the users for the share market are increasing day by day. The online process can be more simple to carry out.