Close Your Demat Account Without Impacting Your Trading Account

How to Close Demat Account Online: A Step-by-Step Guide

When we decide to buy and sell, we search for strategies to reach our objectives, such as creating a demat account. We seem to forget, become drained, and leave stuff lying about. This may have been a costly error. Demat accounts have related fees and operational costs. Thus, any zero or unused Accounts with a demat balance should be closed. We'll lose money if we don't close the unused demat account. You must know how to close a demat account properly.

Key Highlights

  • Demat account openings are at a 13-month high, showing increased interest in local equities markets with excellent returns.

  • A Demat account lets investors retain shares and securities electronically, making stock market investing convenient and secure.

  • To close a Demat account, send a form to the depository participant, such as a bank or investment institution.

  • The trading account buys and sells securities, whereas the Demat account holds shares electronically.

  • Whether you get a refund after closing your Demat account depends on outstanding dues, levies, or payments. 

How Can I Close My Demat Account Online?

We will uncover how to close a demat account in two cases: 

  • In case of account closure,

  • In case of transferring the account.

Follow These Steps to Close a Demat Account Online

Step 1: Download the Demat account closure form from the website of your bank or investment agency if it is your depository participant.

Step 2: Complete the form correctly and send it in with your KYC documentation. Verify that every proof is reliable. In this phase, the forms and paperwork must be physically delivered to the nearest DP office or mailed to the relevant head office.

Step 3: Both account holders must sign the closure form in front of a representative from their respective DP if more than one person has the account.

Step 4: You must verify that the account is positive and has no shares. Logging into your account will allow you to confirm this.

Steps for Closing a Demat Account with Pending Shares/holdings

Step 1: NSDL and CDSL are India's two national depositories. An Intra DIS slip and selection of the "Off-Market transfer option in the Demat account" are necessary for intra-depository transfers.

Step 2: The original client master list (CML), which has the signatures, the stamp, and the logo, must then be obtained from the account.

Step 3: After that, the completed form must be specified with all pertinent information and the names and ISINs of the shares you want to transfer. Together with their ID, a 16-character code, the target client must also be provided.

Step 4: After this, the documents must be mailed to the main office of your DP or turned in to their office.

Step 5: To close, a bank representative must confirm the self-attested Demat closure form.

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Are There Any Charges for Closing the Demat Account?

Demat accounts may attract annual fees and maintenance charges. Closing all your inactive or zero balance demat accounts is a good idea. The remaining unnecessary demat accounts can be canceled, and any current funds can be combined into a single account. 

Sending a request to the relevant depository participant is the first step in closing a Demat account. This may be completed online, and you'll often receive a rapid response, making the entire process hassle-free.

Regarding charges for closing a Demat account, there are no charges when there are no holdings, pending payments, or charges. Nevertheless, any unpaid fees or charges need to be paid before canceling the account.

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Will I Get a Refund If I Close My Demat Account?

The possibility of receiving a refund upon closing a demat account varies depending on several variables, including unpaid fees, charges, or balances. You could not be qualified for a refund if there are no outstanding fees or obligations. 

However, checking with your specific depository participant or brokerage firm for their refund policy regarding demat account closure is advisable. They will be able to provide you with accurate information on whether you are eligible for a refund and any applicable procedures.

Can I Close Demat Account Without Closing the Trading Account?

It is possible to close a Demat account without closing your trading account. Demat and trading accounts are separate entities, with the Demat account holding shares in electronic format and being maintained by depositories like CDSL and NSDL. Conversely, a trading account is used to purchase and sell securities. It is kept up to date by a depository participant. 

It is crucial to remember that since you can only trade stocks with a Demat account, canceling one might make your trading account worthless. It is always advisable to consult with your specific depository participant or brokerage firm for further clarification on the process and implications of closing a Demat account while keeping your trading account active.

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What Happens If the Demat Account Is Not Closed?

Dematerialized accounts will be active forever. However, it can go dormant if not used for six months. Investors will then need to contact the DP again to renew it. Owners of inactive Demat accounts must be aware that they may still be subject to fees and fines.

Owners of Demat accounts frequently receive an account summary that includes all of their payables and balances as well as any fees assessed against them. These summaries are easily disregarded because they are sent via cryptic emails or uninteresting texts.

Final Words

So there you have it - how to close a demat account. While this is the most common way of closing a Demat account, completely digitalized processes remain in nascent stages. Demat account closure requires filing a form to the depository participant, such as a bank or investment business. Account closure takes 7-10 business days and can be done online. 

Whether you get a refund depends on account dues, charges, and payments. Terminating a Demat account without closing your trading account is possible, but a trading account without one may be meaningless. Always visit your depository participant or brokerage company for details on closing a Demat account.

FAQs

What documents are required to close a Demat account?

The documents required may vary depending on the DP. Still, generally, you must submit the account closure form, your Demat account ID and DP ID, and your KYC details, including your name and address.

How long does it take to close a Demat account?

The closure process usually takes approximately 7 to 10 business days from the submission date of the account closure form.

Will I receive a refund when closing my Demat account?

Several criteria, including any unpaid fees, charges, or balances related to the account, will determine whether you get a refund. You could not be qualified for a refund if there are no unpaid fees or obligations.

Can I close my Demat account without closing my trading account?

While it is technically possible to close a Demat account without closing your trading account, it is essential to note that a trading account may become useless without a linked Demat account, as trading securities typically require a Demat account.

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13 Dec, 2023

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