How to Close a Demat Account: Step-by-Step Guide For Online and Offline Methods

Closing a demat account is a straightforward process. All it takes is following the correct procedure. Whether you are switching brokers, simplifying your finances, or no longer trading, understanding how to close a demat account online and offline can help.

Demat accounts, short for dematerialised accounts, are essential for holding shares and securities digitally. However, many account holders with dormant or unused demat accounts continue to incur charges. 

Understanding the use of a demat account closure form, how to transfer shares, and the precautions to take helps you manage your demat accounts easily.

A demat account is an account that allows you to hold shares and other financial instruments digitally. In India, demat accounts are maintained by two major depositories:

• Central Depository Services Limited (CDSL)

• National Securities Depository Limited (NSDL)
  

To get a demat account, you must register through intermediaries known as Depository Participants (DPs), such as stockbrokers or banks. Each DP offers different features and charges, which can influence your decision to maintain or close these accounts over time.

Various personal or financial reasons may lead you to close your demat account. Here are some common reasons:

• Duplicate or Multiple Accounts

You may accidentally open more than one demat account over time. This leads to confusion and increases maintenance charges. 

• Inactive or Dormant Accounts

If the account is not used for years, and there are no plans to trade again, it makes sense to close it.

• High Maintenance Fees

Some brokers may charge annual maintenance fees even if the account is unused. Closing these accounts helps avoid unnecessary costs.

• Changing Brokers

If you are switching to a different brokerage, you may choose to close your current account. You must do so after transferring or selling your securities.

• Better Consolidation

Managing all securities under one account is easier for tracking and record-keeping purposes.

Online demat account closure is convenient and is offered by most brokers. However, the option may be available only if the account is in a single holder’s name or there are no holdings or dues. To close your account online, here are the general steps you can follow: 

Steps to Close Online

1. Clear all your holdings before proceeding 

2. Contact your DP by logging in to their web portal or mobile app

3. Fill out the closure form provided by your DP

4. Along with the form, submit all the necessary documents 

5. Settle any remaining dues before the procedure starts  

6. The DP will verify your request and process the account closure once everything is in order

Offline closure is a standard method, especially for joint accounts or those with residual holdings. Here is how to close a demat account offline. 

Steps to Close Offline

1. Visit your DP’s nearest branch to check requirements and clarify the process physically 

2. Fill out the demat account closure form

3. Submit the form along with ID proof, statements, and any required documents 

4. Ensure all holdings are sold or transferred and no dues are pending  

5. Wait for confirmation and further processing 

You must also attach a written demat account closing letter with your signature to your DP. This acts as a valid proof of your intent to close the account.

To close a Demat account, you need to submit a duly filled account closure form along with key documents. Here's what you'll typically need:

• Demat Account Number & DP ID
  

• PAN Card and address proof (e.g., Aadhaar, utility bill)
  

• Client Master Report (CMR) if transferring holdings
  

• Signature(s) of all account holders (for joint accounts)
  

• Reason for closure

Closing your demat account is irreversible. Make sure you complete the following steps first. 

1. Ensure Your Holdings are Nil

You must sell or transfer all shares or holdings to another demat account. Accounts with holdings cannot be closed directly.

2. Check and Clear Dues

Clear any pending charges like Annual Maintenance Charges (AMC) or penalties. Also, ensure that your account does not have a negative balance.

3. Download Transaction Statements

Keep copies of transactions and holding statements from your DP for future reference.

4. Close Linked Trading Accounts 

If your trading and demat accounts are connected, ensure the trading account is also closed to avoid future charges. If your shares are in a frozen pool account or belong to a delisted company, your account can only be closed after the pool account is unfrozen or the company’s ISIN becomes active.  

5. Keep the Delivery Instruction Slip (DIS) Handy

For transferring securities, you will need to fill out a DIS, which is available from your DP.

6. Ensure There are No Active SIPs or Mutual Funds

Check twice for any unsettled mutual funds or SIPs linked to your account.

A demat account closure form is mandatory, required by DPs to formally close your demat account. The form typically contains:

• Personal details of the account holder(s)

• DP ID and Client ID

• Account type (individual/joint/corporate)

• Reason for closure

• Transfer instruction (closure or transfer cum closure)

• Signature(s) of all account holders

You can download it from your DP’s website or request a physical copy from a branch.

Transferring securities is necessary before you can proceed with closure. This transfer can happen in two ways, mainly: 

• Intra-depository Transfer: Moving shares within the same depository (CDSL to CDSL or NSDL to NSDL)

• Inter-depository Transfer: Moving shares across depositories (e.g., CDSL to NSDL)

Required Documents

• DIS (Debit Instruction Slip)

• Copy of the client master report of the receiving account or 16-digit client ID 

• Signed DIS slip

Once the transfer is processed and holdings become nil, you can proceed with the closure request.

Closing a demat account involves a few careful steps, whether done online or offline. It is important to ensure all dues are cleared, holdings are transferred, and documentation is submitted correctly. This ensures that your account is closed securely without any future liabilities.

To understand the exact process and requirements, you must refer to the official websites of CDSL, NSDL, and your DP. If you are unsure about any step, reach out to your depository participant for assistance. This will enable you to carry out the closure process seamlessly.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.