It is easy to open a Demat account online (or offline) with the help of a stockbroker. But when it comes to closing your Demat account, the process is not a cakewalk. Closing a Demat account is an offline and tedious process.
If you have an inactive Demat account, it is always recommended to close the account. Every year your account attracts an Annual Maintenance Charge (AMC). It is usually between Rs 300 – Rs 600 charges in a year. So, it is better to close your inactive Demat account.
Before closing the Demat account, you should check the following points:
- Your Demat account should have no shares.
If you still have shares left in your account, then you can either sell these shares. Or you can transfer them into your new Demat account.
- Your Demat account should have no negative balance.
If you are inactive for quite a long time, chances are there you might have a negative balance in your account. It can be the usual AMC charges by your stockbroker.
- Every stock brokerage firm has its Demat account closure form.
You can find the Demat account closure form on the website of the brokerage firm. You have to download the form, fill it and send the form. You can send it by courier or email. It is safe to do both.
After submitting the form, it usually takes 7-8 working days to close your account.
Note: Keep a photocopy of the account closing form with you before sending it to your stockbroker. You need to send the Account closure form, a signed photocopy of your PAN card and the Receipt received from the post office during courier. You can also mail all these documents to your stockbroker for further proof.
More About Closing Your Demat and Trading Account
If you want to close your Demat account but keep your Trading account open, you can also close your account through Depository Participant (CDSL or NSDL in India). But, you have to identify who your Depository Participant (DP) is. Then download the form, fill it and submit it to your DP.
Can you close your Demat account online?
Nowadays, many brokers allow traders to close their Demat account online. You will have to drop a mail to Customer Support and ask them to close your account. You will then receive a mail from their side, and once your request is processed, you have to submit a signed photocopy of your PAN card and Account closure form. It usually takes 7-10 working days to close the account.
Closing your Demat account is free. So, if you have multiple Demat accounts or stopped using your Demat account for a long time, it is best to close it. It will save you from paying AMC charges and help you to keep track of your shares. You can freeze your Demat account if it’s temporarily not in use to avoid any fraudulent activity in future.