Who Can Open a Demat Account in India?

A Demat account is necessary to hold securities in electronic form and participate in the stock market. As of FY2025, over 192.4 million Demat accounts have been opened in India. Any individual or entity which fulfils the eligibility criteria as per the regulatory guidelines can open a Demat account in India. They can provide the valid documents to complete the due procedure. This article explains who can open a Demat account in India and its requirements. 

Who Can Open a Demat Account in India?

The following individuals and entities may open a Demat account in India: 

1. Resident  

Any Indian citizen aged 18 years or above with a valid identity and address proof may open a Demat account. 

2. Minors 

A Demat account can be opened in the name of a minor. A parent or legal guardian operates the account until the minor turns 18. Trading is not allowed in minor accounts. 

3. Non-Resident Indians (NRIs) 

NRIs may open a Demat account under the Portfolio Investment Scheme (PIS) or the Non-PIS route. The account is typically opened with a designated bank and a registered depository participant (DP). 

4. Hindu Undivided Families (HUFs) 

A Demat account may be opened in the name of the karta (head of the family) by an HUF, who operates the account on behalf of all the members. 

5. Companies and Corporate Bodies 

Registered companies may open Demat accounts to hold shares, debentures, or other securities in electronic form. They must submit company-related documents and board resolutions. 

6. Partnership Firms and LLPs 

These entities may open a Demat account in the name of the firm. A copy of the partnership deed or LLP agreement is required along with authorised signatory details. 

7. Trusts 

Registered trusts may open Demat accounts. A copy of the trust deed and resolution from the trustees is usually needed. 

8. Joint Holders 

A Demat account may be opened jointly by up to three individuals. All holders must complete KYC formalities. 

Eligibility Criteria for Opening a Demat Account

To open a Demat account, the following eligibility criteria must be met: 

• Minimum Age 

The individual should be at least 18 years old. For minors, a guardian opens the account and manages it. 

• Valid PAN Card 

A Permanent Account Number (PAN) is mandatory for all individual and non-individual account holders. 

• Bank Account 

The Demat account must be linked with a bank account for fund transfer for trading purposes. 

• Active Mobile Number and Email ID 

These details are needed for verification, communication, and receiving alerts from the depository. 

Documents Required to Open a Demat Account

The documents you need to open a Demat account are as follows. 

• KYC Documents: Submission of identity proof (e.g., Aadhaar card, passport, voter ID) and address proof is necessary under SEBI rules. 

• For NRIs: NRIs may also need to provide a copy of the passport, proof of overseas address, and a PIS letter from a bank (if any). 

• For Non-Individuals: Entities such as companies, HUFs, LLPs, and trusts must submit registration documents, board resolutions or authority letters, and details of authorised signatories. 

Benefits of Opening a Demat Account

Opening a Demat account offers many benefits, some of which are as follows: 

• Safe Storage: A Demat account may help store shares and other securities in electronic format, reducing the risk of loss or damage. 

• Minimal Paperwork: Eliminates the need for physical share certificates, making it convenient and error-free. 

• Immediate Access to Holdings: In a Demat account, investors may check their investments anytime from anywhere. 

• Easy Tracking: Investors can view their holdings and transaction history through periodic account statements. 

• Quick Settlements: Securities are transferred automatically after trades are settled, which saves time. 

• Access to Analysis and Research: Many brokers provide research and analysis tools with their Demat account platforms to help investors make proper investment strategies. 

• Availing Corporate Benefits: Holding shares in a Demat account enables investors to seamlessly receive corporate benefits such as dividends, bonuses, etc. 

• Record Keeping: A Demat account keeps a record of all the transactions. This simplifies tracking losses and gains, which may help them with taxation. 

Conclusion

A Demat account plays a key role in the securities market, facilitating the electronic holding of securities. Individuals, NRIs, companies, and other eligible entities can open it after completing the due formalities. However, meeting the eligibility criteria, completing KYC, and providing relevant documents is crucial. Understanding the requirements to open a Demat account in India can help investors and organisations take the right steps to enter the securities market.