What is a Dematerialized Account or Demat Account?
Let us start by Understanding briefly about Demat Account!!
A Demat account, short for Dematerialized account, is an electronic repository for financial securities such as stocks, bonds, mutual funds, and exchange-traded funds (ETFs).
It enables digital possession of your investments, eliminating the need for physical certificates. This digitalization enhances security, reduces paperwork, and streamlines the process of buying, selling, and transferring securities.
In India, maintaining a Demat account is mandatory for trading in the stock market.
Now little about ZERODHA!
Zerodha is a prominent Indian financial services company headquartered in Bengaluru. Founded in 2010 by brothers Nithin and Nikhil Kamath, Zerodha has revolutionized the brokerage industry with its innovative, technology-driven approach.
As of May 2024, it boasts over 7.5 million active customers registered with the National Stock Exchange (NSE), making it one of the largest stockbrokers in India.
Zerodha offers a range of services, including equity trading, deriva’tives trading, currency trading, commodity trading, and mutual funds.
By the way the name Zerodha is formed by combining Word “Zero” and Sanskrit word “Dha” meaning Charge. So the combination makes it Zerodha i.e Zero Charge. This is how Zerodha Positioned itself.
Opening a Demat account with Zerodha offers several advantages that cater to both novice and experienced investors.
Key Benefits For Opening the Account With Zerodha
1. Cost-Effective Trading
- Zero Brokerage on Equity Delivery and Mutual Funds: Zerodha charges no brokerage fees for equity delivery trades and direct mutual fund investments, making long-term investing more affordable.
- Flat ₹20 Fee on Intraday and F&O Trades: For intraday, futures, and options trades across equity, currency, and commodity segments, Zerodha levies a flat fee of ₹20 or 0.03% per executed order, whichever is lower.
2. User-Friendly Platform
- Kite Trading Platform: Zerodha’s flagship platform, Kite, is designed with a sleek and intuitive interface, providing a seamless trading experience across web and mobile devices. It offers advanced charting tools, real-time data, and a universal instrument search feature, enabling efficient navigation and informed decision-making.
- Console Backoffice: This comprehensive dashboard allows users to monitor their portfolios, access detailed reports, and download tax-ready statements, ensuring effective portfolio management.
3. Comprehensive Investment Options
- Diverse Asset Classes: Zerodha provides access to a wide range of investment avenues, including stocks, derivatives, mutual funds, ETFs, bonds, and commodities, enabling investors to build a diversified portfolio.
- Coin Platform for Mutual Funds: Through Coin, Zerodha’s mutual fund platform, investors can directly invest in mutual funds without any commission, facilitating cost-effective wealth accumulation.
By choosing Zerodha, investors benefit from competitive pricing, user-centric platforms, and a broad spectrum of investment options, all designed to enhance the trading and investing experience.
Prerequisite for Account Opening
To open a Demat account with Zerodha, it’s essential to have the following prerequisites in place:
1. Essential Documents
- PAN Card: A self-attested copy of your Permanent Account Number (PAN) card is mandatory for identity verification.
- Aadhaar Card: Ensure your Aadhaar is linked to your current mobile number to facilitate OTP-based verification during the account opening process.
- Bank Account Proof: Provide proof of your bank account to link it with your trading account. Acceptable documents include:
- A personalized cancelled cheque with your name printed on it.
- A bank statement or passbook copy displaying your account number, bank logo, MICR, and IFSC codes.
- Income Proof: Required if you intend to trade in Futures & Options (F&O) segments. Acceptable documents include:
- The latest six months’ bank statement or passbook.
- Latest salary slip.
- Income Tax Return (ITR) acknowledgment.
- Net worth certificate from a Chartered Accountant.
- Statement of demat holdings.
2. Digital Requirements
- Stable Internet Connection: A reliable internet connection is crucial to smoothly complete the online application and verification processes.
- Device with Camera: A smartphone, tablet, or computer equipped with a camera is necessary for In-Person Verification (IPV). During IPV, you’ll be required to display a one-time password (OTP) sent to your registered mobile number while being clearly visible on camera.
Having these documents and digital tools ready will streamline the account opening process with Zerodha, ensuring a hassle-free experience.
How to open an Account in Zerodha?
STEP #1
- Enter Your Mobile Number ,OTP and Email ID.(Make Sure You Enter Mobile number linked to Your Bank Account and Aadhar Card)
- No need to add Country code as it is added by default.
- You will get a OTP on the entered Number. It will be valid for 10 Mins. So keep your mobile in close proximity.
- Now you will be prompted to enter your Email ID.
- You can login by entering Email ID or you can login directly by Gmail.
STEP #2
- Now enter PANCARD Number and your Date of Birth.
- Date of Birth has to be entered in YYYY-MM-DD Format.
- Click Continue.
- Now you will be Prompted to Select which segments you want to participate in.
A. Equity and Mutual Funds : Select This one if you want to trade in Individual stocks and ETFs. If you are passive investor or Beginner you should choose only this option.
B. Futures and Options : Select this option only if you want to take leverage and do speculation. Else Choose only First option.
C. Commodity : Select this option if you want to trade in Commodities such as Silver, Copper, Zinc and Crude Oil.
STEP #3
- Next Step is to do your Aadhaar Verification.
- Once you click Continue.You will be directed to Pehchaan App.
- Fill in the details and press Next.
STEP #4
- Now you will be prompted to enter your Personal details.
A. Father’s Name : Fill the Name as on your Aadhar Card.
B. Mother’s Name
C. Marital Status : If you are not married fill single, else fill Married.
D. Annual Income Bracket : Choose as per your Annual Income. For Example if your Annual Income is Rs. 7 Lacs. Choose 5-10 Lacs Option
E. Trading Experience : If you are newbie select New else choose as per your total trading experience.
F. Occupation : If any of the options provided does not fit. Choose others.
G. Preference for Account Settlement : Keep it Quarterly as it is by default.
H. Political Exposure : Unless you don’t have blood relation with any Politician or you don’t have any politically sensitive information. Fill this option as No.
STEP #5
Next Add Your Bank Account Details. This can be done using two methods.
A. Using UPI : This method is Quick. You just have to scan the QR code from any of your UPI apps.
B. Entering Account Number Manually : In this method you enter your bank account details Manually and Process it.
Note : Rs.1 Would be deducted from your Account to verify the account. However this would be refunded back once the verification is complete. It could take few hours to complete. Hence don’t Panic if you don’t get refund immediately.
STEP #6
- Next, you’ll proceed with video verification.
- Your webcam will need to be turned on for this process.
- Previously, you had to hold a paper displaying a specific number while looking into the camera. However, Zerodha has now simplified it—now, you only need to look into the camera.
- Next Step is to upload Signature and Bank Proof.
- Take a signature on Blank Paper and take a picture. Upload the same. Preferred formats are JPEG and PNG.
- For Bank Proof upload a copy of Cancelled Cheque or Passbook Copy.
STEP #7
- Next, the step is to add a nominee.
- A nominee is a person you designate to inherit your investments in case of any unforeseen circumstances. This ensures a smooth transfer of assets without legal complications. You can nominate a family member, spouse, or any trusted individual.
- You can also add multiple nominees. If you choose to have more than one nominee, you must specify the percentage allocation for each. For a single nominee, the percentage must be set to 100%.
STEP #8
- The final step is completing the Digital Signature process.
- To verify your identity, you will need to authenticate using your Aadhaar number. This is done through e-sign, a secure and legally valid method that links your Aadhaar to your digital signature. Once you enter your Aadhaar number, you will receive an OTP (One-Time Password) on your registered mobile number. Enter this OTP to complete the verification process.
- This step ensures that your account is securely authenticated and legally approved for activation.
FAQs on Demat Account Opening with Zerodha
1. What is a Demat Account?
A Demat (Dematerialized) account is an electronic account that holds your financial securities like stocks, bonds, mutual funds, and ETFs in digital form. It eliminates the need for physical share certificates and ensures secure, hassle-free transactions in the stock market.
2. Why is a Demat Account Necessary?
In India, a Demat account is mandatory for trading in shares and other securities. It simplifies investment management, enhances security, and eliminates the risk of loss or damage to physical share certificates.
3. How is Zerodha Different from Other Brokers?
Zerodha is India’s largest discount broker, known for its zero brokerage on equity delivery and mutual funds and a flat ₹20 fee for intraday and F&O trades. It offers a user-friendly trading platform (Kite), advanced charting tools, and a cost-effective investment approach.
4. What Are the Documents Required to Open a Zerodha Demat Account?
To open an account, you need:
- PAN Card (Mandatory for identity verification)
- Aadhaar Card (Linked to a mobile number for OTP verification)
- Bank Proof (Cancelled cheque/passbook/bank statement)
- Income Proof (Required for trading in Futures & Options, such as a bank statement, salary slip, or ITR)
5. How Long Does It Take to Open a Zerodha Demat Account?
If all documents are correctly submitted, the account is usually activated within 24-48 hours. Any discrepancies in documents may delay the process.
6. Is There Any Charge for Opening a Zerodha Account?
Yes, Zerodha charges a nominal account opening fee, which may vary. Check Zerodha’s website for the latest fee structure.
7. Can I Add Multiple Nominees?
Yes, you can add multiple nominees, but you must allocate percentage shares to each. If you have a single nominee, the allocation must be 100%.
8. What Is Video Verification, and Why Is It Required?
Video verification is a compliance step where you verify your identity using a webcam. Previously, users had to hold a numbered paper in front of the camera, but now, you simply need to look into the camera.
10. What Is Digital Signature (e-Sign) and How Does It Work?
The digital signature (e-Sign) process is the final step of account opening. You will authenticate your identity using your Aadhaar number and OTP verification, making the process legally valid and secure.
