How to Close your Demat Account

Learn the step-by-step process of closing a Demat account and understand why it's important.
How to Close your Demat Account
3 mins
26 October 2023

If you are looking to close your Demat account, it is important to understand the process and requirements involved.

What is a Demat account?

A Demat account, short for Dematerialised account, is a digital repository that securely holds all your financial assets, including securities, stocks, shares, bonds, and more. By converting these holdings into electronic format, it eliminates the need for physical share certificates, which can be vulnerable to loss, theft, or damage. Whether you have investments in shares, exchange-traded funds (ETFs), government securities, corporate bonds, or mutual funds, a Demat account is designed to house all these assets in one convenient location.

Why should you close a dormant Demat account?

If you have a dormant Demat account with no holdings or a zero balance, it is advisable to consider closing it. Demat accounts often come with annual maintenance fees and maintaining an empty or inactive account can be an unnecessary expense.

Demat account closures: Two types

Demat account closures typically fall into one of two categories:

  1. Basic account closure: This is a straightforward process that account holders can follow when there are no holdings, pending payments, or charges in their Demat account. The procedure is usually quick and hassle-free, often completed online.
  2. Transfer and account closure: When you still have securities or charges payable in your Demat account, closing it becomes more complex. This situation requires transferring the relevant holdings to another Demat account, which can involve additional steps and processes.

How to close your Demat account: The do’s and don’ts

Here are the essential do’s and don’ts when closing your Demat account:

Do’s:

  1. Check for any holdings in your Demat account, such as mutual funds, shares, bonds, etc.
  2. Ensure that the account balance is not negative during the closure process.
  3.  Make sure there are no open trades or positions in the market associated with your account.
  4. Download a copy of the account closure form and carefully read the terms and conditions.
  5. Submit the closure form along with your Know Your Customer (KYC) documentation.

Don’ts:

  1. Do not forget to dematerialise your shares, if required.
  2. Never invest more than what you can afford to lose in the market.

How to close your Demat account

To close your Demat account, follow these steps:

  1. Download the Demat account closure form from your depository participant's website.
  2. Accurately fill out the form and submit it along with your KYC documentation.
  3. Send the form to your DP’s registered address for processing.

Typically, it takes 7-10 business days to complete the account closure process when all necessary paperwork is filed correctly.

Details required for closing a Demat account

When closing a Demat account, you will need the following details and documents:

  • The closure application form, which can be downloaded from your depository participant's website
  • Your Demat account number and DP ID
  • KYC proofs like PAN card
  • Provide a reason for closing the account
  • Submission of the account closure form to the DP’s head office

Conclusion

Closing a Demat account can be a straightforward process if you follow these steps carefully and ensure that all necessary details are accurately provided in your application form. Whether you are consolidating your investments or simply moving on, taking these steps will help you navigate the Demat account closure process with ease.

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*Terms and conditions apply

Standard Disclaimer

Investments in the securities market are subject to market risk, read all related documents carefully before investing.

Research Disclaimer

Broking services offered by Bajaj Financial Securities Limited (BFSL) | Registered Office: Bajaj Auto Limited Complex , Mumbai –Pune Road Akurdi Pune 411035 | Corporate Office: Bajaj Financial Securities Ltd,1st Floor, Mantri IT Park, Tower B, Unit No 9 & 10, Viman Nagar, Pune, Maharashtra 411014 | CIN: U67120PN2010PLC136026 | SEBI Registration No.: INZ000218931 | BSE Cash/F&O (Member ID: 6706) | DP registration No : IN-DP-418-2019 | CDSL DP No.: 12088600 | NSDL DP No. IN304300 | AMFI Registration No.: ARN – 163403 |

Research Services are offered by Bajaj Financial Securities Limited (BFSL) as Research Analyst under SEBI Regn: INH000010043. Kindly refer to www.bajajfinservsecurities.in for detailed disclaimer and risk factors

This content is for educational purpose only.

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Investment in the securities involves risks, investor should consult his own advisors/consultant to determine the merits and risks of investment.

Frequently asked questions

Can I close only the Demat account?

No, you cannot close only the Demat account. Both the Demat and trading accounts are interconnected and function together, necessitating the closure of both simultaneously.

Can I close my Demat account online?

No, closing your Demat account online is not an option. To close your Demat account, you must follow these steps:

  • Fill out the account closure form.
  • Submit the closure form and send it to the DP’s registered address.
  • The closure process typically takes 7-10 business days to complete.
What happens if I do not close my Demat account?

If you do not close your Demat account within a year, it becomes inactive. Reactivation requires a request with your stockbroker. Additionally, failing to close your Demat account can lead to annual maintenance charges and potential exposure to fraudulent activities.

How do I know if my Demat account is closed?

Your stockbroker or DP will send you a confirmation through SMS, email, or any other relevant channel on the closure of your Demat account.

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