A Demat account is used to hold shares and securities in an electronic (dematerialised) format. These accounts can also be used to create a portfolio of one’s bonds, ETFs, mutual funds, and similar stock market assets.
The Demat full form stands for a Dematerialised Account. It is an online portfolio that holds a customer's shares and other securities electronically — removing the need to handle and trade physical share certificates.
Dematerialised AccountDemat trading was first introduced in India in 1996 for NSE transactions. As per SEBI regulations, all shares and debentures of listed companies must be dematerialised to carry out transactions on any stock exchange from 31st March 2019.
Introduced 1996 · Mandatory 2019A demat account works similarly to a bank account — except it holds your investments instead of money. Here's the flow:
When you buy shares, they are electronically added to your demat account — just like money being deposited into your bank account.
✔ Credited (Added)When you sell shares, they are electronically removed from your demat account — similar to a withdrawal from your bank.
✖ Debited (Removed)Your demat account is linked to your trading account (for placing buy/sell orders) and your bank account (for settling payments). All three work in sync for seamless transactions.
Demat · Trading · BankThink of your Demat account as a digital locker for your shares, your Trading account as the counter where you place orders, and your Bank account as the wallet that pays for them.
From eliminating paperwork to enabling instant transactions, a demat account modernises every aspect of investing.
Keep these 5 documents ready before you begin your demat account application — the process is quick once you have them handy.
Permanent Account Number — mandatory for all financial and securities transactions in India.
Your 12-digit Aadhaar number serves as both identity and address proof for instant KYC verification.
A utility bill, bank statement, or any government-issued document confirming your current address.
Recent passport-size photographs as required by your depository participant (DP).
A valid government-issued photo ID — such as a passport, voter ID, or driving licence.
PAN card is mandatory and cannot be substituted. For most brokers today, Aadhaar-based e-KYC allows you to complete the entire process online in under 15 minutes — no physical documents need to be couriered.
Opening a demat account takes less than 15 minutes online. Just follow these 4 simple steps.
No branch visits. No physical paperwork. Your account is ready once e-sign is complete.
