How to Close a Demat account?

A dematerialized account is a necessity to trade in Indian stock markets. When an investor chooses to start trading on the stock market, they begin by opening their Demat account which will hold electronic copies of all their securities. As time passes, if one does not continue using their account as often and no longer sees the need for it, it might be smart to close the account completely. Unfortunately, most people let their Demat account lie dormant, and the account incurs its annual maintenance fee which becomes an unnecessary expense.

Prevent making this costly error by closing your account if you are not using it. This way you will not end up losing money towards your account’s maintenance charge. It is vital to learn the ins and outs of how to close a Demat account. This helps in doing the needful as soon as you realize there is no need for you to have an active Demat account.

How to Close your Demat Account?

Most brokerage websites will let you close your account online, but others may request that you also submit a letter in person requesting closure. Hence, carefully read the entire closure process beforehand so you are prepared. Firstly, check if your brokerage offers any official closure form. This may be downloaded off of your brokerage’s website. This form will require that you fill in all your personal identification and account identification information. This way your brokerage can be sure that it is you and not some unknown third party that is requesting for account closure.

You can make a request for closure via email or through your brokerage firm’s website. Submit the duly signed closure form and any necessary paperwork. There are some things to keep in mind when you learn how to close your Demat account. Take care of these few pointers before you go ahead and close your account.

• Ensure that there are zero holdings in your account. Sell any remaining shares before closing your account.
• Ensure that your Demat account does not have any negative balance. You can check these details by logging into your account online by contacting a registered branch of your brokerage.
• Ensure you download ‘Account Closure Form’ and other important paperwork which will be necessary for you to submit when you request for Demat account closure.

Deactivating Your Demat Account

Fill out the account closure form with your most updated information. Usually, if more than a single person runs a Demat account, all of the holders are necessitated to sign the account closure form in the presence of a DP (depository participant) from the brokerage. Hence, this process may have to be carried out in the brokerage firm’s branch or bank.

Typically, you are required to carry with you all the following documents and information which will be submitted in conjunction with your closure form.

• Your Demat account’s ID as well as your DP ID
• Your KYC details such as your name and addresses that are supposed to match those present in your account’s records.
• Your reason for closing your account at this moment.
• A verified and self-attested identity proof copy such as Aadhar, PAN, or passport. This may vary depending on the brokerage.

Submit all this information online, or to your brokerage’s nearest branch in person. This will vary depending upon your brokerage, but the process is usually offline.

In case your Demat account has any holdings:

Suppose you wish to close an account with some holdings in it. The closure process remains the same. You still have to fill out the closure form. However, there will be an additional delivery instruction slip (DIS) or similar document which you will be required to fill to transfer your securities to a separate Demat account. Both accounts should usually have the same account holders.

You may be required to submit a client master report from a central depository of your new Demat account where you wish to transfer any preexisting securities. Usually, with this document, a stamp, logo and a signature are also necessary. There may be other documents for KYC purposes. You will be required to submit all these documents to your DP’s head office. After you have done this your request will be processed.

Conclusion:

As described, learning how to close a Demat account is simple. There are minimal steps involved and no additional charges to close your account. Closing an inactive account as soon as possible can save your money right now as your annual maintenance charge will cease as well. Why wait when you can save your money?