How To Open A Joint Demat Account

The first thing about a Joint Demat account is that a joint account cannot be opened online.

Below is the step-by-step process to open a joint demat account.

Steps On How To Open Joint Demat Account

Step 1: The Investor needs to print, fill and then submit the application at the branch of your DP.

Step 2: Select the type of opening Demat account you wish i.e. single or joint holder.

Step 3: The 1st holder’s correspondence address should be filled in the Demat form. All communications will be directed to the 1st holder.

Step 4: KYC documents of all the holders along with passport-sized photographs need to be submitted

Step 5: Identification documents like PAN card, address proof and identity proof for all holders needs to be submitted.

Step 6: Complete the application with your signature, upload all the documents required for Demat account opening or submit them physically by visiting the branch of the stockbroker of your choice.

Step 7: Since joint Demat accounts are opened offline a specified processing fee needs to be paid, but this amount varies from one DP to the other.

Step 8: Once all the verifications are complete the investor will receive a Demat account number along with the login credentials in respect to that account.

There can be 2 special cases under which a joint Demat account can be opened.

1. Primarily, when there are physical shares in a joint Demat account.

2. Secondly, when you have a joint account with another broker and intend to close that Demat account and transfer the shares to a different account.

A Demat account can be opened by a consortium of people but held by a single entity will not under any circumstance be referred to as a joint account.

A joint Demat account can be opened only during the application phase of the account opening but a single account cannot be transformed to a joint account.

If a person wishes to add a joint holder to an account it can only be done by adding the person’s name as the nominee to that account, a nominee has no operational capabilities over the account but can be used after the account has been transferred to the nominee with all rights by the ex-1st holder. The process of having a joint Demat account might seem complicated but ensures lawful usage of the account.

Conclusion

What we understood is that a Demat account can be of various formats. A joint account allows financial literacy of all participants and provides ease of access of the account to all its users. Having a nominee to your account is of importance because it allows proper usage of the account after the 1st holder of the account transfers his rights.

The other point an investor should keep in mind is that once a Demat account has been opened a second holder name cannot be attached to that account; if the 1st holder wishes to add a 2nd name to the account it can only be done by adding as a nominee to that account.

In a special case where one of the joint holder’s pass away, a new Demat account should be opened in the name of surviving joint holders in the same order of names as the old account and only then can the shares from the previous account be transferred or traded. Once a Demat account has been established with a registered Depository Partner one cannot delete or remove a joint holders name in case of a joint account, for this reason it is suggested to add only close relatives as a joint holder to your Demat account.