The Demat Account is one of the important accounts that carry the financial securities of the account holders digitally. In addition, it trades on the investments made in the shares of the share market. Just like a bank account is important to put money in the bank, a Demat account is necessary to retain the shares that you have already acquired.
Recent reports suggest that there has been a significant rise in the participation of people in the stock market. Many of these accounts, however, are old and have not been used for years. Therefore, the accounts that are inactive and have zero balance need to be cancelled. In such circumstances, the accounts are known as Dormant accounts. As these accounts incur an annual fee even when they are inactive.
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Annual and maintenance fees are levied on Demat accounts. If the account has existing active balances, they can be combined into a single account, and the remaining redundant Demat accounts can be cancelled. For the closure of the Demat account, the account holder needs to visit the DP office or branch to submit the necessary forms and paperwork.
PROCEDURE TO FOLLOW THE CLOSURE OF DEMATS ACCOUNT:
1. The application form can be downloaded from the website of the depository participant, or DP.
2. Client ID and DP ID
3. Name and address should match the records.
4. The reason for the account closure.
5. The closure request form must be signed by all account holders.
6. The POA holder (if any) cannot sign the closure request.
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7. In case the Demat account has any balance (holdings), the form must include information about the account to which the amount has to be transferred.
8. The transfer can also be completed by completing a delivery instruction sheet (DIS) prior to closing the account.
9. It takes 7 to 10 business days to cancel the account when the paperwork is filed and everything is in order.
10. The account closure is free of cost. If the account has any kind of negative cash balance, it needs to be resolved before the shutdown of the account.
