Know About Joint Holders in Demat Account

Are you dreaming of trading in the stock market? Then you must have a Demat account and a trading account as a prerequisite to begin trading in stock markets. Now you may wonder, “What is a joint Demat account?”

The meaning of Joint Demat account: A Demat account is also known as a dematerialization account. It works like your savings bank account; your Demat account is credited or debited with shares for every transaction. You can keep your securities safe with a Demat account, and you need a trading account to buy and sell shares. 

All accounts, bank accounts, Demat accounts, and trading accounts must get linked together with a broker. Stockbrokers are the entities that provide these accounts. One can open the account from any stockbroker in the market, but the recommendation is to open both Demat and trading accounts from the same broker. These are crucial for a safe trading experience. 

Some investors may prefer to open a joint Demat account with their family or friends. But a joint trading account is not permitted. So let’s understand the joint Dematerialized account in depth.

Joint Demat Account

Investors can open a joint Demat account, like a joint bank account with a maximum of three holders, one primary account holder and two joint holders. To open a joint Dematerialized account, investors must print, fill out, and send the Demat application form to the broker’s head office. In addition, there is a need to fill out the Demat application form with the first holder’s correspondence address. One cannot open a joint Dematerialized account online. 

All the communications related to the joint Dematerialized account will get shared with the first holder. The bank accounts details of the first holder also must be submitted to the broker. In addition, all three holders must submit their KYC forms and their passport-sized photographs attached and self-attested, individual address proofs, and PAN card details to complete the KYC criteria. 

Benefits of a Joint Demat Account

When the death of any joint holder in a Demat account, the ownership can get shifted to the remaining account owners’ name. The nominee will benefit after all three Demat account joint holders are dead.

One of the benefits of opening a joint Dematerialized account is saving on account maintenance charges. However, you will have to pay some annual costs for each account if you have two or more Demat accounts in your family members’ names. In addition, all account holders’ involvement is required in critical transactions to close the joint Dematerialized accounts.

How to Open a Joint Demat Account?

You can open a joint account exclusively offline rather than opening it online. One can also open a joint Dematerialized account when you hold physical shares in their Demat account. There are specific steps to open a joint Dematerialized account with a broker.

The following are the steps an investor needs to follow:

First Step

The first step is to approach any trusted depository participants (DP) to open a Joint Dematerialized account. There are a dozen of such DPs in the Indian stock market. An investor can open a Demat account with their bank or stock broking agencies.

Second Step

The second step is downloading the application form and other required documents from their website, such as an ECS mandate form and a KYC document. Finally, get all the required copies of your PAN card, address proof, and identification verification documents while visiting the broker’s office.

Third Step

Fill out the application form and provide your sign at all the required and indicated places specified. Then hand over the application form to the broker. The broker will then proceed with the further approval procedures. While filling out the form, remember to specify the type of Demat account you want, joint or single. You are also entitled to determine the nominee details more clearly to the broker. 

After successfully verifying the application form, your broker will give you a number for your Demat account and the online login credentials. If you find any difficulties or any questions during the application filing process, you can contact the customer care number of the broker to clarify.

Now you may have an idea about the joint Dematerialized account opening processes.

Documents & Papers Required for Opening a Joint Dematerialized Account

• Aadhaar card, all three holders are required to submit their Aadhaar card details.
• PAN card: All the account holders must provide PAN card details except the one discharged from obtaining their PAN card.
• A photograph in passport size for all the account holders
• Personalised cheques are given to all account holders and then cancelled.
• Once the Demat account’s document standards have been cleared and submitted, the account will face termination within five working days.

Conclusion

One point to remember is that an investor cannot open a joint Dematerialized account with a minor as one account holder. Go through all the steps given in this article and then contact a stockbroker to open a joint Dematerialized account.