Investing wisely goes beyond just picking the right stocks; it involves safeguarding your assets for the future. One crucial aspect of securing your investments is adding a nominee to your Demat account. Whether you’re a seasoned investor or just starting, ensuring that your holdings are protected is paramount. Nomination declarations must be submitted or the option to opt out of nominations exercised by December 31, 2023. If investors don’t nominate their holdings, Sebi might freeze withdrawals from their accounts. Investors who’ve already submitted their nomination details need not do so again.
In this blog, we’ll walk you through the straightforward process of how to add a nominee to your Demat account online. Let’s check out the simple yet significant steps!
What is a DEMAT account?
A Demat account is like a digital wallet for your investments. It holds stocks, bonds, and other financial assets in electronic form instead of physical certificates. This makes buying and selling investments easy and quick. You can check and manage your holdings online, and it’s a safer way to keep track of your investments compared to dealing with paper documents. In short, a Demat account simplifies the process of investing in the stock market and other financial instruments. You can now open a DEMAT account via depository participants, also known as DPs, which refer to financial institutions that have been approved by central securities depositories. In India, the two main bodies are the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL).
Prerequisites for Opening a DEMAT Account
To be eligible to open a DEMAT account, you have to be an Indian citizen, be above 18 years of age, and have an active bank account. There are certain documents required too. Here they are:
- a PAN Card
- Proof of Address (Aadhaar Card, driver’s license, and passport)
- Signature on White Paper
- Income proof for activation of futures and option segments
How to add a nominee to a DEMAT account online?
Here’s what you should do.
Steps to add a nominee to DEMAT account online
- Visit the official website of the DEMAT service provider. Here we are using NSDL.
- Enter DP ID, client ID, and PAN card details, i.e., login credentials.
- Scroll over to the Accounts Settings or Profiles section
- Search for the “Nomination” or “Nominee” option
- Provide nominee details
- Upload any supporting documents
- Confirm the nomination details
- Authenticate via OTP
- Submit a nomination request
- Confirm approval
Make sure the information you share is correct and current. If your situation or relationship status has changed, keep that in mind. If you’re unsure about anything, reach out to the customer support of your depository participant—they can guide you in the right direction.
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FAQs
Can I nominate minors?
Yes, you may nominate a minor for your DEMAT account. Guardian details in the KYC need to be provided in such a case.
What happens if there is no nominee?
If you do not add a nominee to your DEMAT account prior to the deadline, the account will get frozen, and investors will not be able to buy or sell shares. Adding a nominee is vital to make sure the transfer of shares is smooth in case the investor dies.
Can I change the nominee later?
If you so wish, you may change the nominee in your DEMAT account. All you have to do is fill out a form and submit it to the DP. You can also do this process online to make it smoother.
Can you open a joint DEMAT account?
Yes, you can open a joint DEMAT account. The account holders would need to furnish the necessary KYC documents, namely a PAN card, address proof, and bank proof.
Do I have to pay any fees for my DEMAT account?
Yes, there is a certain sum to be paid to the depository participant for the DEMAT account.