Before you invest in the stock market, the first question is often: who can open demat account in India? The good news is that eligibility is wide. Resident individuals, minors (through a guardian), NRIs, HUFs and many types of entities can all open a demat account, provided they complete KYC. In this guide, SMC Global Securities explains who can open demat account, the documents required, and how the Basic Services Demat Account (BSDA) works for small investors.
Who Can Open Demat Account in India?
If you are asking who can open demat account, here is a simple breakdown of the categories allowed:
Resident Indian individuals: Anyone aged 18 or above with valid KYC documents can open a demat account in their own name.
Minors: A minor can hold a demat account, but it is operated by a parent or legal guardian until the child turns 18. The minor’s PAN is required.
Joint holders: Up to three individuals can hold a joint demat account, with the first holder as the primary holder.
Non-Resident Indians (NRIs): NRIs can open a demat account, and need an NRE or NRO bank account (with portfolio investment permissions for trading in Indian equities).
Hindu Undivided Families (HUFs): An HUF can open an account through its Karta, with a PAN in the name of the HUF.
Companies, LLPs and partnership firms: Entities can open a demat account with incorporation or registration documents and authorised signatories.
Trusts, societies and other institutions: These can also open demat accounts with the relevant constitutional documents.
So, who can open demat account? Almost every investor with valid identity and address proof and a bank account can.
Eligibility Conditions to Open a Demat Account
Whoever you are, you must meet these basic conditions:
1. Valid PAN: PAN is mandatory for nearly every investor.
2. Completed KYC: Identity and address must be verified through an officially valid document, such as Aadhaar.
3. Bank account: You need an active bank account in your name for settlement of funds.
4. Age: Adults open accounts directly; minors need a guardian.
5. Mobile number and email: These are used for OTPs, alerts and statements.
No minimum income or minimum investment amount is required by law to open a demat account, so a student, a salaried professional or a homemaker can all start investing. Income proof is needed only if you want to trade in futures and options.
Documents Required to Open a Demat Account
The documents depend on who opens the account:
Individuals: PAN, Aadhaar, bank proof, photograph, signature.
Minors: Guardian’s KYC, minor’s PAN, birth certificate or proof of age, and relationship proof.
NRIs: PAN, passport, overseas address proof, visa or residence proof, NRE/NRO bank details.
HUFs: HUF PAN, Karta’s KYC and a declaration.
Companies and firms: Incorporation or registration certificate, PAN, board resolution or partnership deed, and authorised signatory details.
How to Open a Demat Account Online
Once you know who can open demat account, the process is easy. Visit the open demat account page of SMC Global Securities and enter your mobile number and email. Verify with OTP, complete e-KYC with your PAN and Aadhaar, link your bank account, upload your signature and photo, add a nominee and e-sign. After verification, your account is activated.
Who Can Open a Basic Services Demat Account (BSDA)?
The Basic Services Demat Account (BSDA) is a low-cost account that SEBI introduced in 2012 for small investors. When people ask who can open demat account at a lower cost, the answer is the Basic Services Demat Account (BSDA). Under SEBI’s June 2024 circular, a basic services demat account (BSDA) is meant for individuals who meet these conditions:
The investor holds only one demat account where they are the sole or first holder across depositories.
The value of securities held is up to ₹10 lakh.
The account holder is an individual, and not a company, firm or trust.
The charges for a basic services demat account (BSDA) are nil for holdings up to ₹4 lakh and capped at ₹100 per year for holdings between ₹4 lakh and ₹10 lakh. If the holding value goes above ₹10 lakh, regular demat charges apply. DPs are also required to offer a basic services demat account (BSDA) to eligible investors.
Who Cannot Open a Demat Account?
While the list of who can open demat account is long, some people cannot open one:
Anyone without a valid PAN or KYC (with limited exceptions)
Individuals who cannot provide valid identity and address proof
Persons barred by SEBI or another regulator from dealing in securities
Anyone submitting false or mismatched information
In these cases, the DP may reject the application until the issue is fixed.
Tips Before You Open a Demat Account
Make sure the name on PAN, Aadhaar and your bank account matches.
Use your own mobile number and email.
Add a nominee.
Compare account maintenance charges, brokerage and platform features.
Ask whether you qualify for a basic services demat account (BSDA).
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