If you own a Demat account but no longer use it, you may still be incurring charges. Knowing how to stop these expenses can help you better manage your finances.
Similar to how a savings or current account is essential for banking transactions, a Demat account is mandatory for stock market investments. It serves as a repository for your purchased shares. However, even if your account is inactive, annual maintenance charges continue to accrue. To avoid these unnecessary expenses, it is advisable to close your unused Demat account.
Leaving a Demat account dormant not only incurs regular maintenance fees but also makes it prone to being deactivated. By closing such accounts, you can streamline your financial planning and avoid needless payments.
The procedure for closing a Demat account differs slightly across Depository Participants (DPs), which may include banks, financial institutions, or brokerage firms. While online closure is generally not an option, you can start the process by downloading the account closure form from the DP’s official website. Once the request is submitted, the account is typically closed within 10 working days.
Clear All Holdings:
Ensure that no shares or funds remain in your account. You can either sell the securities or transfer them to another active Demat account.
Contact Your Depository Participant:
Get in touch with your DP to understand the exact closure process. Contact details are usually available on your account statement or the DP’s website.
Settle Outstanding Charges:
Pay any pending dues, such as annual maintenance or transaction fees, to ensure a smooth account closure process.
Complete the Closure Form:
Download the account closure form from the DP’s website. Provide details such as your account number, personal information, and the reason for closing the account.
Submit Required Documents:
Along with the form, attach copies of your PAN card, proof of identity, and proof of address.
Verification of Documents:
The DP will verify the submitted details and documents.
Account Closure Confirmation:
Once verified, the DP will initiate the account closure process. You will receive a confirmation either via email or postal mail within a few days.
Closing an inactive Demat account is a straightforward process that can help you avoid unnecessary costs. By following the outlined steps and ensuring all dues are cleared, you can prevent the hassle of managing an unused account while optimizing your financial strategy.
