- How To Close Demat Account
If you are not using your Demat account for long, but still keep getting charged yearly fees. It is better to close all your inactive or zero balance Demat accounts. It attracts annual fees and maintenance charges. Thus, if there are active balances, they can be consolidated into one account and the remaining redundant accounts can be closed.
Opening a Demat account is now a completely online process. However, closing a Demat account is not an easy task. It involves paying a visit to the broker’s office and submitting forms and documents. Let us understand in detail how to Close the Demat account?
Details Required for Closing a Demat account
You need to include the following details while submitting your closure form:
- DP and client ID
- KYC details like name and address. These should be in line with the records.
- Reason for closing the Demat account.
- Is there more than one person holding the Demat account? Then, all holders must sign the closure form.
Closing a Demat Account: Procedure
Find who is your Depository
There are only two depositories in India, NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).
Download account closure form
You can download the form by visiting your depository website or broker.
Ensure that there are no shares in the account
To close your account, the foremost thing is to ensure whether there are any shares in the account. If there are, you need to transfer them to another account. You need to make sure your Demat account is empty before you can decide to close it.
No negative cash balance
Negative cash balance can increase due to the non-payment of annual maintenance fees or any other charges. If you request an account closure without settling your account, your application will be rejected.
Submit the application
You should mention the details of the new depository account if any and a few other details. Once the request is successfully submitted, the depository takes nearly 4-6 working days to complete the procedure.
Transferring Shares from One Account to Another
In case all your payments have been settled and the Demat account holds securities which need to be transferred to another Demat account, the investor needs to:
- Request for the closure form.
- Duly-fill Delivery Instruction Slip (DIS) to transfer the securities to different Accounts.
- Receive original (CML) Client Master List (Target DP) with the stamp, logo, and signature.
- Submit all documents at the nearest branch.
- Apart from that, send duly filled and signed documents to the Head office.
- Once the documents are submitted, the account will be closed within 5 working days.
Things to Know about Closing the Demat Account
- When there are no shares in your Demat account and you do not intend to hold any shares in the Demat account then you can choose to close the Demat account. Even if your account doesn’t hold any balance, you are required to pay the annual maintenance charges (AMC) to the DP.
- If you are holding shares in your Demat account and want to hold them in physical form, you need to submit an account closure form to your DP and choose the option of
- Rematerializing your remaining shares in the Demat account. However, you also need to fill up a Remat Request Form along with the account closure form. Once the registrar of the company is satisfied and receives fresh physical certificates, the Demat account is automatically closed.
- Finally, you can close accounts as part of your account consolidation exercise.
