A Demat account is primarily a storage solution for your dematerialised securities. With this account, you can also apply for a trading account and seamlessly invest in the market. A joint Demat account is a versatile solution that builds on this, offering these same services to more than one individual.
Here, each holder has equal access, and this streamlines investing efforts while also promoting seamless collaboration. These are just some of the benefits of a joint Demat account, and you should be aware of them as an investor. Similarly, there are a few joint Demat account rules you must keep in mind.
Read on for a comprehensive overview of these accounts and to know all about the joint Demat account opening process.
A joint Demat account allows multiple individuals to conduct transactions and store securities in a dematerialised form. The Demat joint account allows for a primary account holder and a maximum of two secondary account holders.
This account can prove beneficial if you intend on investing in the stock market with your business partners or family members.
Knowing how a joint Demat account benefits the parties involved helps you utilise it efficiently.
In a joint Demat account, you can add a total of three members, which includes a primary holder and two secondary holders. Individuals, spouses, business partners, or family members are all allowed to operate a single account, if registered jointly.
Yet another advantage of a joint Demat account is that various account holders can pool resources to leverage the tool better. This can be helpful for investing in lucrative securities that may be costlier. By pooling the resources, you can get access to more capital, which can help you invest for a larger gain.
Every transaction in a joint Demat account requires the consent of each account holder. Even if a single holder initiates a transaction, all the holders need to approve it. This makes the account and its functions transparent, while providing an extra layer of protection. Such safeguards also protect the account against fraud and unauthorised transactions.
In case of the demise of an account holder, the surviving account holders will get access to those securities. The account holders can continue with the existing joint Demat account or sell the securities without any issues.
Do note that all account holders can jointly appoint up to three individuals as nominees for this account. However, joint account holders can’t have separate nominees.
Many providers allow exemptions on the payment of annual maintenance fees if you have a joint Demat account. It is the cost-efficient alternative to having three individual Demat accounts, wherein every member must pay the fees separately.
Here are the joint Demat account rules and some essential points that require your consideration.
Every transaction made through a joint Demat account needs to be approved and verified by each account holder. Only after receiving the required consent will the transaction move ahead.
The primary holder of the joint Demat account is responsible for paying the capital gains tax on the earnings made through the account.
For transactions in the stock market, you need to have a trading account and a Demat account. The joint Demat account is linked to a single trading account, which is generally held by the primary holder. All necessary communications regarding the account will be shared with the primary holder.
After opening your joint Demat account, you are not allowed to make changes to the details. This is applicable to names, birth dates, and other information of the account holders.
Here are the steps involved in the joint Demat account opening process.
Step 1: Choose a Depository Participant (DP) for a joint Demat account and submit your account application
Step 2: Submit the supporting documents. These include:
Step 3: Complete the in-person verification of every joint Demat account holder
Step 4: Wait for processing and access your joint Demat account
Armed this information, you can open a joint Demat account and avail all the benefits on offer. On Bajaj Markets, you can open a Demat account and convert it into a joint Demat account with ease.
Yes, you have the option to open a joint Demat account online. You need to choose a Depository Participant or DP. Then, you need to visit the DP’s official website and follow the instructions. You will need to submit the supporting paperwork and perform e-KYC verification to complete the process.
In case of the untimely death of an account holder, the surviving account holder(s) are entitled to the securities. You need to submit the application and paperwork to prove the passing of the joint Demat account holder.
In a joint Demat account, all the account members must approve and validate the transaction. Even if a single member initiates a transaction, all holders must provide their consent for the same.
To open a Demat joint account offline, you need to fill out an application form by printing it from the DP’s website. Then, you must submit it at the DP’s branch and follow the verification processes.