Demat Account in India: A Guide to Everything You Need to Know

Demat Account | FAQs | History | Account Opening | Demat Charges | Pros and Cons of Demat Accounts | Costs associated with demat accounts

Introduction

A Demat Account, short for Dematerialised Account, is an electronic account used to hold and trade securities in India. It is an efficient and secure way to hold shares, bonds, debentures, mutual funds, and other investment instruments in a digital format.

Before the introduction of Demat accounts in India, investors used to hold physical certificates of securities which were cumbersome to store and manage. With the advent of technology, dematerialisation of securities took place, and Demat accounts were introduced to facilitate the buying and selling of shares in a paperless manner.

The purpose of a Demat account is to provide a secure and convenient way to hold and trade securities. With the help of a Demat account, investors can buy and sell securities without any physical paperwork, thus reducing the risk of loss or theft of physical certificates. The transactions are settled in a quick and hassle-free manner, and investors can access their holdings and transaction history online.

Demat accounts have revolutionized the way securities are traded in India, making it easier and more accessible for investors to participate in the stock market. The introduction of Demat accounts has also contributed significantly to the growth and development of the Indian capital market.

History of Demat Accounts in India

The history of Demat accounts in India dates back to the early 1990s. The Securities and Exchange Board of India (SEBI) first introduced the concept of electronic holding of securities in 1996, and the Depository Act was enacted in the same year, which paved the way for the establishment of depositories in India.

National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) were the two depositories that were set up to provide electronic trading in securities. Initially, the use of Demat accounts was voluntary, and investors were allowed to hold securities in both physical and electronic forms.

However, with time, the use of Demat accounts became more prevalent, and the Indian stock market saw a shift towards electronic trading. In 1998, SEBI made it mandatory for certain categories of investors, such as institutional investors, to hold their securities in electronic form.

In 1999, SEBI made it compulsory for all investors to hold their shares in Demat form. This move was aimed at reducing the time and cost associated with the settlement of trades, and it also helped to eliminate issues such as forged certificates and fake securities.

Since then, Demat accounts have become an essential part of the Indian stock market, and their usage has increased exponentially. Today, most transactions in the Indian capital market are settled through Demat accounts, making it a crucial component of the Indian securities market infrastructure.

Types of Securities that can be held in a Demat Account

A Demat account is a digital account that holds securities such as shares, bonds, debentures, mutual funds, exchange-traded funds (ETFs), and government securities in electronic form. Here are some of the types of securities that can be held in a Demat account:

  1. Equity shares: Demat accounts are primarily used to hold equity shares, which are the most commonly traded securities in the Indian stock market. Both listed, as well as unlisted Indian equity shares can be held in the demat account.
  2. Bonds and Debentures: Corporate and government bonds (including Sovereign Gold Bonds i.e. SGB) and debentures can also be held in a Demat account. Holding these securities in Demat form provides a secure and efficient way to manage them.
  3. Mutual Funds: Mutual fund units can be held in Demat form, which eliminates the need for physical documents and makes the process of buying and selling mutual funds much more straightforward.
  4. Exchange-Traded Funds (ETFs): ETFs are securities that track the performance of an underlying index, and they can also be held in a Demat account.
  5. Government Securities: Government securities such as treasury bills, bonds, and securities issued by the RBI can be held in a Demat account.
  6. Corporate Actions: Demat accounts also facilitate corporate actions such as bonus shares, rights issues, dividends, and stock splits.

Demat accounts provide a convenient and secure way to hold a variety of securities in electronic form, making it easier for investors to manage their investments and trade in the Indian stock market.

The Process of opening a Demat Account in India

Opening a Demat account in India is a simple process, and anyone who wishes to invest in the stock market can easily do so. Very often, the stock beroker that you open an account with opens a demat account with their partner depository participant viz. either National Securities Depository Limited (NSDL) or Central Depository Services Limited (CDSL)

Nevertheless, in case you wish to open a demat account (in India) yourself, here’s a brief overview of the process :

Step 1: Choose a Depository Participant (DP) The first step in opening a Demat account is to choose a Depository Participant (DP). A DP is a registered intermediary that acts as an interface between the investor and the depository. Investors can choose a DP based on the services offered and the fees charged.

Step 2: Fill up the Account Opening Form After selecting a DP, the investor must fill up the account opening form, which can be obtained from the DP. The form requires personal information such as name, address, PAN number, and bank account details.

Step 3: Submit Required Documents Along with the account opening form, the investor must submit necessary documents, such as PAN card, Aadhaar card, address proof, and passport size photographs.

Step 4: In-person Verification (IPV) After submitting the account opening form and required documents, the investor must undergo an In-person verification (IPV) process. This can be done by visiting the DP’s office, where the DP will verify the investor’s identity and take a photograph.

Step 5: Activation of the Demat Account After completing the above steps, the DP will process the application and activate the Demat account. Once the account is activated, the investor can start buying and selling securities in the stock market.

In summary, the process of opening a Demat account in India is a simple and straightforward process that can be completed within a few days.

Understanding your Demat Account Number

When you open a Demat Account, you are assigned a unique account number which acts as your identification number in the Depository System. Your Demat Account number is a combination of numbers and alphabets and is usually 16 digits long. It is important to understand your Demat Account number as it is required for all transactions related to your holdings.

The first 8 digits of your Demat Account number represent the DP (Depository Participant) ID. This is the unique identification number of the Depository Participant where you have opened your Demat Account. The next 8 digits represent your unique client ID, which is assigned by the DP at the time of account opening.

It is important to note that your Demat Account number may change if you switch your Depository Participant. In such a case, you will need to update your new Demat Account number with all the companies whose shares you hold in your account.

Your Demat Account number is a confidential piece of information and should not be shared with anyone. Ensure that you keep your Demat Account number and other login credentials safe and secure to avoid any unauthorised access to your account. By understanding your Demat Account number, you can easily track your holdings and carry out transactions in a hassle-free manner.

Documents needed for Account Opening

To open a Demat Account in India, there are certain documents that you need to provide. The list of documents required may vary slightly depending on the broker or depository participant you choose, but in general, you will need the following:

  1. Identity Proof: This could be your PAN Card, Aadhaar Card, Voter ID Card, Passport, or Driving License. Any one of these documents is sufficient as proof of identity.
  2. Address Proof: You can provide any one of the following documents as proof of address – Passport, Voter ID Card, Aadhaar Card, Bank Account Statement, Utility Bills, Rent Agreement, or Driving License.
  3. Passport Size Photograph: You will need to provide a recent passport size photograph of yourself along with the application form.
  4. Income Proof: Some brokers may ask for your income proof, which could be your salary slip, ITR Acknowledgement, or Form 16.

It is important to note that all the documents you provide must be self-attested, and the original copies of the documents should be carried along for verification purposes. The broker or depository participant may also ask for additional documents or information, so it is best to check with them beforehand. Providing accurate and valid documents is essential for a hassle-free and smooth Demat Account opening process.

Holding Shares in Demat Account v/s Holding Physical Shares: Pros and Cons

In India, the two primary ways of holding shares are in physical form or in dematerialized form (Demat Account). A Demat Account is an account that holds securities such as shares, bonds, and mutual funds in electronic form. On the other hand, holding physical shares means owning the share certificates of the company.

Pros of holding shares in a Demat Account:

  1. Convenience: Holding shares in a Demat Account is more convenient than holding physical shares as there is no need to worry about handling the physical share certificates or the risk of loss or damage. Demat Account holders can easily buy, sell, or transfer securities with a few clicks on their computers or smartphones.
  2. Cost-effective: Holding shares in Demat form is generally more cost-effective than holding physical shares. Physical shares involve printing, couriering, and storage costs, which are eliminated when shares are held in Demat form.
  3. Reduced paperwork: Holding shares in a Demat Account reduces the paperwork involved in handling physical shares. For instance, share certificates require signature verification, which can be a time-consuming process, while Demat shares can be traded electronically with ease.
  4. Lower risks: Holding shares in a Demat Account reduces the risks associated with holding physical shares. Physical shares can be stolen, lost, or damaged, and their replacement can be a complicated process. Demat shares eliminate these risks, providing a more secure way of holding securities.

Cons of holding shares in a Demat Account:

  1. Dependence on technology: Holding shares in a Demat Account is entirely dependent on technology. If there is a technical glitch, it can result in the loss of access to the account or even the loss of shares. However, this risk can be mitigated by taking appropriate security measures and maintaining backup records.
  2. Risk of fraud: Holding shares in a Demat Account can expose investors to the risk of fraud. If the account is not adequately secured, unauthorized transactions or hacking can lead to the loss of shares.
  3. Additional charges: Demat Account holders are charged fees for account opening, maintenance, and transactions. These charges can be relatively small, but they do add up over time, and investors must be aware of them.

Pros of holding physical shares:

  1. No dependence on technology: Holding physical shares eliminates the dependence on technology, making it a safer option for investors who are not tech-savvy.
  2. No additional charges: Holding physical shares does not involve any additional charges other than the cost of handling physical shares.

Cons of holding physical shares:

  1. Inconvenience: Holding physical shares can be inconvenient as they require physical storage and handling. This can be particularly challenging for investors who own a large number of shares.
  2. High-risk factor: Holding physical shares can be riskier as they are prone to theft, loss, and damage.

In summary, both holding shares in a Demat Account and holding physical shares have their pros and cons. However, holding shares in a Demat Account is generally more convenient, cost-effective, and secure, making it a preferred option for most investors. Holding physical shares, on the other hand, has its advantages for investors who are not comfortable with technology or who prefer the traditional approach of owning physical assets.

Advantages of Holding Securities in Demat Form

Holding securities in Demat form has become increasingly popular among investors in India due to the numerous advantages it offers over traditional physical securities. Here are some of the key benefits of holding securities in Demat form:

  1. Safe and Secure: One of the biggest advantages of holding securities in Demat form is that it offers a high level of safety and security. With Demat accounts, investors don’t have to worry about the risk of loss, theft, or damage of physical securities. The shares are held electronically in a secure and centralized system, which eliminates the risk of physical damage or loss.
  2. Convenient: Another significant advantage of Demat accounts is that they are convenient to manage. Investors can easily track their holdings, monitor stock prices, and make trades online through their Demat account. This eliminates the need to visit a physical broker or transfer physical securities, which can be time-consuming and inconvenient.
  3. Cost-Effective: Holding securities in Demat form can also be more cost-effective than traditional physical securities. With physical securities, investors have to pay for printing and stamping charges, handling charges, and courier fees, which can add up to significant costs. On the other hand, Demat accounts typically have lower fees and charges associated with them.
  4. Faster Settlement: Demat accounts also offer faster settlement times, which can be a significant advantage for investors. With physical securities, settlement times can take several days, and the process can be time-consuming and complicated. With Demat accounts, settlement times are typically much faster, as transactions are processed electronically and settled in just a few hours.
  5. Loans Against Securities: Investors who hold securities in Demat form can also avail of loans against their holdings. This can be a significant advantage for investors who need funds for emergencies or other purposes. Banks and financial institutions are more likely to offer loans against Demat securities, as they are easier to verify and have lower risk.
  6. No Worries About Corporate Actions: Holding securities in Demat form can also eliminate worries about corporate actions. Investors with physical securities have to worry about keeping track of dividend payments, bonus issues, and other corporate actions. With Demat accounts, these actions are automatically credited to the investor’s account, making it easier to manage and track.
  7. Better Record Keeping: Finally, holding securities in Demat form offers better record-keeping. With physical securities, investors have to maintain a physical record of their holdings, which can be time-consuming and prone to errors. With Demat accounts, all transactions and holdings are stored electronically, making it easier to manage and track investments.

In summary, holding securities in demat form offers several significant advantages over traditional physical securities. From safety and security to cost-effectiveness and convenience, demat accounts are an excellent option for investors looking to simplify their investments and manage them more efficiently.

Costs associated with demat account

The charges associated with a demat account can be broadly classified into three categories: account opening charges, annual maintenance charges, and transaction charges.

Account Opening Charges:

Most demat account service providers charge a one-time fee for opening a new account. The account opening charges may vary depending on the service provider and the type of account you choose. For example, some service providers may offer a basic account at a lower cost, while others may charge a premium for a premium account with additional features.

Annual Maintenance Charges:

Demat account holders are required to pay an annual maintenance charge (AMC) for the maintenance of their account. The AMC is charged to cover the costs associated with maintaining the account and the securities held in the account. The AMC may vary depending on the service provider and the type of account you hold. Typically, basic accounts have lower AMC, while premium accounts have a higher AMC.

Transaction Charges:

Transaction charges are the fees charged for buying or selling securities through the demat account. These charges are usually a percentage of the transaction value and are subject to a minimum and maximum limit. The transaction charges may vary depending on the service provider, the type of security, and the transaction value.

Additional Charges

In addition to the above charges, some service providers may also levy additional fees for value-added services such as SMS alerts, email statements, online trading, and other value-added services.

It is essential to note that the charges associated with the demat account may vary depending on the service provider and the type of account you hold. Therefore, it is essential to compare the charges and services offered by different service providers before choosing one.

Moreover, investors should also be aware of the tax implications of the charges associated with the demat account. The AMC and transaction charges are subject to Goods and Services Tax (GST) at the rate of 18%. Therefore, it is essential to factor in the GST charges while calculating the overall cost of holding securities in the demat account.

In summary, the charges associated with the demat account are an important aspect to consider while choosing a service provider. The account opening charges, annual maintenance charges, and transaction charges are the primary fees associated with the demat account. It is essential to compare the charges and services offered by different service providers and factor in the GST charges while calculating the overall cost of holding securities in the demat account. By being aware of the charges associated with the demat account, investors can make an informed decision while choosing a service provider and optimize their investment returns.

Tax Implications of transactions in the Demat Account

There are certain tax implications associated with Demat Accounts that investors should be aware of.

  • Firstly, the transfer of securities from one Demat Account to another is considered a taxable event. This means that any gains or losses incurred during the transfer will be subject to capital gains tax. If the securities are held for more than one year, they will be subject to long-term capital gains tax, which is currently at 10%. On the other hand, if the securities are held for less than a year, they will be subject to short-term capital gains tax, which is currently at 15%. It is important to note that capital gains tax is only applicable if there is a profit or gain made during the transfer.
  • Secondly, dividend income earned from securities held in a Demat Account is also taxable. As per the earlier taxation system, the dividend that was received received from an Indian company was exempt from further taxation, since the company would be paying the Dividend Distribution Tax (DDT) before paying the investor. However, the Finance Act, 2020 changed the taxation of dividends received by the shareholder. With effect from 01st April 2020, any dividend received is taxable in the hands of the investor/shareholder. The Act also imposes a TDS (Tax Deductible at Source) of 10% on dividend income paid in excess of Rs 5,000 from a company or mutual fund.
  • Thirdly, if an investor sells securities held in a Demat Account and incurs a loss, they can set off the loss against any capital gains made during the same financial year. This is known as capital gains set-off, and it can help investors reduce their overall tax liability. However, if the investor is unable to set off the entire loss amount, they can carry forward the remaining loss for the next eight financial years and set it off against future capital gains.
  • Lastly, investors are also required to pay Securities Transaction Tax (STT) on every transaction made through a Demat Account. STT is currently at 0.1% for delivery-based equity transactions (for the buyer and seller). STT is also applicable on the sale of equity-oriented mutual funds, and it is currently at 0.001% for redemption of units. It is important to note that STT paid on transactions is not eligible for any deduction or set-off against capital gains tax.

In conclusion, there are certain tax implications associated with holding securities in a Demat Account in India. Investors must be aware of these tax implications to ensure that they comply with the tax laws and regulations in India. It is recommended that investors consult with a tax advisor or a financial expert to understand the tax implications of holding securities in a Demat Account and to plan their investments accordingly.

FAQs (Frequently Asked Questions) about Demat Accounts in India

What is a Demat Account?

Demat Account stands for Dematerialised Account. It is an electronic account that holds securities in electronic form. It is similar to a bank account where you deposit and withdraw money, but in a Demat Account, you hold and trade securities such as shares, bonds, and mutual funds.
Alternatively, think of a demat account like a bank locker for your shares, debentures, and other securities.

Who can open a Demat Account?

Any individual or company can open a Demat Account in India. You can open a Demat Account with a Depository Participant (DP) who is registered with the Depository i.e. either CDSL or NSDL.

What are the documents required to open a Demat Account?

The documents required to open a Demat Account are PAN Card, Aadhar Card, address proof, and a passport-sized photograph. The address proof can be any valid document such as a driving license, Voter ID card, electricity bill, or telephone bill.

What are the charges associated with a Demat Account?

The charges associated with a Demat Account include account opening charges, annual maintenance charges, transaction charges, and other miscellaneous charges. These charges may vary from one Depository Participant to another.

Can I have more than one Demat Account?

Yes, you can have more than one Demat Account. However, it is not advisable to have multiple Demat Accounts unless you have a specific reason for doing so.

How can I access my Demat Account?

You can access your Demat Account through your Depository Participant’s website or mobile application. You can view your holdings, check your transaction history, and make transactions using these platforms.
Alternatively, you may also access the holdings in the demat account through your brokerage account.

What are the advantages of having a Demat Account?

The advantages of having a Demat Account are numerous. It eliminates the need for physical share certificates, reduces the risk of loss or theft, makes trading faster and more efficient, and provides easy access to your holdings and transaction history.

Can I convert my physical shares to electronic form?

Yes, you can convert your physical shares to electronic form by opening a Demat Account and submitting a Dematerialisation Request Form (DRF) to your Depository Participant.

What happens if my Depository Participant OR broker goes bankrupt?

In case your Depository Participant goes bankrupt, your securities are safe as they are held in the electronic form with the Depository. You can transfer your holdings to another Depository Participant by following the transfer process.

Can I hold any type of security in a Demat Account?

No, not all securities can be held in a Demat Account. Only securities that are eligible for dematerialisation as per the guidelines of the Securities and Exchange Board of India (SEBI) can be held in a Demat Account. This includes shares, bonds, debentures, and mutual funds.

Can I transfer securities from one Demat Account to another?

Yes, you can transfer securities from one Demat Account to another through a process called ‘Off-Market Transfer’. You need to fill up a Delivery Instruction Slip (DIS) and submit it to your Depository Participant.

How long does it take to open a Demat Account?

The time taken to open a Demat Account varies depending on the Depository Participant. However, it usually takes around 5-7 working days to open a Demat Account.

Can I close my Demat Account?

Yes, you can close your Demat Account by submitting a written request to your Depository Participant. However, you need to ensure that all your securities are transferred to another Demat Account or converted to physical form before closing the account.

What is a Demat transaction?

A Demat transaction is a transaction where securities are transferred from one Demat Account to another. It can be a buy or a sell transaction, or a transfer of securities from one account to another.

Can I buy or sell securities directly from my Demat Account?

No, you cannot buy or sell securities directly from your Demat Account. You need to place an order with a stockbroker or through an online trading platform, and the transaction will be settled in your Demat Account.

What is a Beneficiary Owner Identification (BOID)?

A Beneficiary Owner Identification (BOID) is a unique identification number assigned to each Demat Account holder by the Depository. It is used to identify the Demat Account holder in all transactions.

What is an Electronic Power of Attorney (E-POA)?

An Electronic Power of Attorney (E-POA) is a digital authorisation that allows a person to act on behalf of the Demat Account holder. It is required for certain transactions such as pledging of securities or opening of a new Demat Account.

Is it mandatory to have a Demat Account for investing in the stock market?

Yes, it is mandatory to have a Demat Account to invest in the stock market in India. All transactions in the stock market are settled through the Demat Account, and physical share certificates are no longer issued.

What are the charges associated with a Demat Account?

The charges associated with a Demat Account vary depending on the Depository Participant. Some common charges include account opening fees, annual maintenance charges, transaction fees, and charges for additional services like SMS alerts and statements.

Can I hold multiple Demat Accounts?

Yes, you can hold multiple Demat Accounts with different Depository Participants. However, it is important to keep track of all your securities and ensure that you do not hold duplicate securities in different accounts.

What happens if my Demat Account becomes inactive?

If your Demat Account becomes inactive due to non-usage, your Depository Participant may charge an account reactivation fee. It is important to keep your account active and transact regularly to avoid these charges.

What is a Demat Request Form (DRF)?

A Demat Request Form (DRF) is used to transfer physical shares into a Demat Account. The DRF needs to be filled and submitted to the Depository Participant along with the physical share certificates.

What is a Corporate Action?

A Corporate Action is an event initiated by a company that affects its securities. Examples of Corporate Actions include stock splits, bonus issues, and rights issues. Demat Account holders are notified of these events and are required to take appropriate action as per their holding.

Can I pledge my securities held in a Demat Account?

Yes, you can pledge your securities held in a Demat Account as collateral for loans or other transactions. However, you need to provide an Electronic Power of Attorney (E-POA) to authorise the pledge.

Conclusion

In conclusion, Demat Accounts have transformed the Indian stock market and made it more accessible and secure for investors. They offer numerous benefits such as convenience, security, ease of trading, and better liquidity. However, they also come with certain drawbacks such as high costs and cyber threats. Therefore, investors must weigh the pros and cons of Demat Accounts and make an informed decision based on their investment goals, risk appetite, and financial situation.

Overall, Demat Accounts are an essential tool for investing in the Indian stock market. They provide a reliable and efficient way of holding and trading securities.

2023 Sovereign Gold Bonds (SGB) Calendar: Everything You Need to Know

Sovereign Gold Bonds (SGB) 2023 | SGB 2023 Calendar | SGB 2023 | SGB Issue Dates Details for 2023 | SGB Issuance Price Details for 2023

Introduction

The Sovereign Gold Bond (SGB) is a popular investment option for those looking to invest in gold. These bonds are issued by the Reserve Bank of India (RBI) on behalf of the government and are denominated in grams of gold. The SGB scheme was first introduced in 2015 and has been gaining popularity ever since.

For 2023, the government has announced that it will issue multiple tranches of Sovereign Gold Bonds throughout the year. These tranches will allow investors to invest in gold in a systematic manner, rather than investing a large sum of money all at once.

Benefits of investing in SGBs in 2023

One of the key benefits of investing in SGBs is that they offer the same benefits as physical gold, but without the hassle of storing or securing the gold. The bonds can be easily traded on stock exchanges, and investors can also choose to redeem them for cash at the prevailing market price.

SGBs also offer an annual interest rate of 2.5% on the initial investment amount. This interest is paid out semi-annually, making SGBs a good investment option for those looking to earn a steady income.

Furthermore, SGBs are considered a safe investment option, as they are backed by the government of India. This means that investors do not have to worry about the creditworthiness of the issuer.

Sovereign Gold Bonds (SGB) Calendar for 2023

Sr. NoSecurity SymbolApplication Starts OnApplication Ends OnSGB Issuance DateOffline Issue Price (₹ per gm)Online/Digital Issue Price (₹ per gm)Tranche
01SGB222304March 06, 2023March 10, 2023March 14, 2023₹ 5,611 per gram₹ 5,561 per gram2022-23 Series IV
02SGB232401March 19, 2023March 23, 2023June 27, 2023₹ 5,926 per gram₹5,876 per gram2023-24 Series I
03SGB232402September 11, 2023September 15, 2023September 20, 2023₹5,923/- per gram₹5,873/- per gram2023-24 Series II
04SGB232403December 18, 2023December 22, 2023December 28, 2023₹6,199 per gram₹6,149 per gram2023-24 Series III

Sovereign Gold Bonds Application Process

Investors who wish to invest in SGBs can do so through banks, post offices, stock exchanges, and other designated channels. The application process is simple and can be done online or offline.

Investors must provide their basic details, such as name, address, and PAN number, along with their investment amount. Once the application is processed, the bonds are credited to the investor’s demat account.

Investors who do not have a demat account can also invest in SGBs through physical certificates. These certificates are issued by the RBI and can be redeemed for cash at the end of the bond’s maturity period.

Important Disclaimer

Investing in SGBs involves risk, and investors are advised to conduct their own due diligence before investing. The value of the bonds can fluctuate depending on market conditions. Also, since the redemption price will be dependent on the spot price at the time of the redemption, there is a possibility that the investors may not be able to redeem the bonds for the full investment amount. It is important to carefully read the prospectus and other documents provided by the RBI before investing in SGBs.

Conclusion

Sovereign Gold Bonds are an excellent investment option for those looking to invest in gold. The bonds offer all the benefits of physical gold, without the hassle of storing or securing the gold. The annual interest rate of 2.5% makes SGBs a good investment option for those looking to earn a steady income.

In 2023, the government will issue multiple tranches of SGBs throughout the year. Investors can invest in these tranches in a systematic manner, rather than investing a large sum of money all at once. The application process is simple, and investors can invest in SGBs through online or offline channels.

Overall, the Sovereign Gold Bond is a safe and attractive investment option for those looking to invest in gold. The government’s commitment to issuing multiple tranches in 2023 provides investors with an excellent opportunity to invest in gold in a systematic and safe manner. However, it is important to conduct due diligence before investing in SGBs.

So, feel free to bookmark the dates for the application dates and issuance dates of the Sovereign Gold Bonds for 2023. The detailed SGB tranches dates calendar for 2021, 2022 have previously been updated, and webnotes.in will continue to update for 2023 as well.

Sources:

Diwali Muhurat Trading [Everything you wanted to know: 2023 Edition]

Diwali Muhurat Trading

Introduction

Hello there. You may have chanced upon this article in case you may have wanted to know about the special trading day called “Diwali Muhurat Trading” day, and/or had one of the following doubts viz.

  • What is Muhurat Trading?
  • What is the origin story for this special day of trading, which is not seen in any other country’s stock exchanges
  • What date/time can I carry out Muhurat trading this year.

This article hopefully will answer your question. So, let’s begin…

What is Diwali Muhurat Trading?

Diwali Muhurat Trading is a special day during the festival of Diwali, when the Indian stock exchanges (viz. the NSE, and the BSE) have a special one (01) hour symbolic trading session, in the evening (during the non-working hours).

On this day, it is generally considered auspicious to buy stocks, as a tribute to the Hindu Goddess Lakshmi.

What date is Diwali Muhurat Trading this year?

This year, the trading session will be on 12th November 2023 (TBC).

  • Start of Muhurat trading Session: TBC
  • End of Muhurat trading session: TBC

However, do note that there is no trading during the usual 0915-1530 hours on the day of the Muhurat trading.

History of the practice

There is no documented history of the origin of the Muhurat Trading. But, the speculation is that this may have started eons ago, when the traders, and brokers (who were mainly Marwari, and Gujarati) would make symbolic purchases of the companies they wished to hold for a long time. Also, word-of-mouth accounts indicate that Diwali was considered auspicious to start new trading accounts for prospective clients as well. Hence, this could also be the origin story. However, no documented records indicate the actual story.

Conclusion:

Hopefully, this article answers any of the questions that you (the reader) may have had about this unique practice of Muhurat trading. If interested, feel free to check out the other wiki articles, or how-to guides on our website.

Thank you, and all the best in your investment journey!

Links/Sources:

How to get Zerodha CMR (Client Master Report) Copy online? [Step-by-step Guide: 2022 edition]

Step-by-Step Guide. How to download Zerodha CMR copy online?

Introduction

Welcome to this post, in case you have probably been asked by a stakeholder for the CMR (Client Master Report) copy from your stock broker i.e. Zerodha. In all probability, you must be have been requested for the Client Master Report Copy ( or abbreviated to CMR) for some off-market transactions. With Zerodha, the process to get the CMR copy is seamless, and easy.

What is Client Master Report (CMR)?

First off, you might have the question. What exactly is the CMR (Client Master Report) copy?

CMR stands for Client Master Report. The CMR copy is a digitally signed PDF copy, that is issued by the broker, with whom you have a demat account; and is sort of a digital snapshot of all the details of your demat account, along with your bank account details.

Mind you, the CMR copy will NOT have the list of securities/equity shares (name, ISIN, quantity) that you own. For that, you will have to refer the Statement of Holdings report that the depositories (viz. CDSL, or NSDL) emails you on a periodic basis.

Can you get the Zerodha CMR copy online?

Yes. You can easily get the CMR copy online through the Zerodha console. It will take about 15 minutes of your time, and the you can follow the step-by-step guide to download the Zerodha CMR copy online.

Step-by-Step Guide to get a CMR copy from Zerodha

Time needed: 15 minutes

How to get the Client Master Report (CMR) copy online?

  1. Go to “Documents” module of Zerodha Console, and login, if not already logged in

    Visit the following link: https://console.zerodha.com/account/documents, and login, if not already logged in.

  2. Select “Zerodha CMR Copy” from the dropdown of desired documents, and click “E-mail to Me”

    Select the option “Zerodha CMR Copy” from the drop-down option, and click “E-mail to me”. You should then see the following on-screen message: “Zerodha CMR copy has been sent to your registered e-mail”.

  3. The link to download the CMR copy will be sent to your registered email

    You should then receive an email with the link to download the CMR copy. You can use the link to download the document. Mind you, the link is usually valid for 6 hours only, and if not downloaded, the link will expire, and you will have to request for the CMR copy again through an another request, repeating the same process.

  4. Done!

    That is it. You now have a soft copy of the Client Master Report (CMR) that can be shared with any party that would request for the same.

What to do if broker insists on physical CMR copy?

There are still instances, where the broker or any other intermediary may insist on physical copies of the Client Master Report (CMR). Personally, I have also encountered the same.

For this, Zerodha indicates that the digitally signed CMR copy should be sufficient for any transactions. So this digitally signed CMR copy from Zerodha should be sufficient for all purposes.

QUOTE

Digitally signed CMR is as good as physical CMR if your depository participant insists on the CMR for transferring of securities (both off-market or online transfer) or shifting/closing of a demat account. See NSDL regulation (Circular No.: NSDL/POLICY/2021/0075 Dated: July 19, 2021) and CDSL regulation (Circular: CDSL/OPS/DP/POLCY/2021/311 Dated: July 16, 2021 ).

UNQUOTE

Conclusion

So, that is it. You now have the soft copy of the Zerodha Client Master Report (CMR) copy. All the best in your investing journey!

How to apply for IPO through Zerodha [2022 Edition]

[Step-by-step Guide]: How to apply for IPO online through Zerodha

Introduction

So, you must have arrived at this article wanting to know the complete process to apply for your desired Initial Public Offering (IPO) through Zerodha. Hopefully, this article will guide you through the process, and ensure that you apply for the IPO correctly, and ensure that your application is not rejected, owing to points that can be avoided.

Can you apply for IPO online through Zerodha?

YES. You can apply for IPO online through Zerodha. You will find the detailed step-by-step guide below. The application process will take about 15 minutes of your time, followed by the time-delay to receive the UPI mandate, which needs to be accepted within the time frame.

However, please note, and check the pre-requisites before starting the IPO application process.

Checks before you apply

Check the below, before starting with the IPO application process:

  • You have a demat account with Zerodha, along with the login credentials ready at-hand.
  • You have a UPI 2.0 enabled app setup. The list of UPI 2.0 enabled apps can be found at this link.

Step-by-step Guide: How to apply for IPO through Zerodha

Time needed: 15 minutes

  1. Visit the IPO module in Zerodha console, and login.

    Visit the IPO section, Portfolio module of your Zerodha Console. [link], and login with your Zerodha credentials, if not already logged in.

  2. Select your desired IPO Issue you wish to apply for.

    Under the list of “Ongoing IPOs”, click “Apply” on the IPO you wish to bid for.

  3. Enter the requested details, and click “Submit”

    In the pop-up that opens up, enter all the requested details, viz.
    – Your UPI ID
    – Investor Type i.e. choose from Individual Investor, Employee quota, OR Policy Holder quota
    – Quantity
    – Price
    Next click the check box to accept the terms and conditions, and click “Submit”.
    You will receive a confirmation on screen of the order successfully placed.

  4. Accept the UPI Mandate Request on your UPI 2.0 enabled app

    Finally you will receive UPI Mandate Request on your UPI app of choice (BHIM, Google Pay etc.). Once the mandate is accepted, the application process is now complete.

  5. Done!

    With the acceptance of the UPI mandate, the application process is complete. Meanwhile, you would also receive an email from the exchange with the details of the IPO application order number details.

Conclusion

The online IPO application process for Zerodha is now complete. All you have to do now is wait for the allotment date.

On the date of the allotment, there are two possibilities:

  1. You receive the IPO allotment: In this scenario, the mandate would be executed i.e. the blocked amount would be deducted, and the appropriate number of shares would be credited to your demat account. These shares can be traded/sold with effect from the date of the listing.
  2. You do not receive the IPO allotment: In this scenario, the mandate would be cancelled i.e. the blocked amount would be released, and no other action would be undertaken. Of course, in this scenario, you would also NOT receive the shares.

So, that is it. You have now successfully completed the online IPO application process for Zerodha. All the best in your investing journey!

[Step-by-Step Guide]: How to apply for Equity Shares buyback through Zerodha

How to tender shares for buyback through Zerodha and how to apply for shares buyback through Zerodha

Introduction

Welcome to this article on how to apply for buyback OR tender buyback shares through Zerodha. Buyback, as you might know is one of the methods a company (listed/unlisted) uses to return excess cash reserves back to the shareholder.

Can you apply for equity shares buyback /tender equity shares through Zerodha?

Yes. You can apply for equity shares back / tender equity shares through Zerodha through this simple 3 (three) step process. This process will take a maximum of 15 minutes of your time. Please note that the buyback process through Zerodha will work ONLY in the offer window period. No applications will be accepted before/after the offer window period.

Step-by-Step Guide for tendering shares in buyback process through Zerodha

Time needed: 15 minutes

  1. Visit the Corporate Actions Section of Zerodha Console

    ◦ Visit the following link https://console.zerodha.com/portfolio/corporate-action-order-window.
    ◦ Login with your credentials, if requested for.

  2. Choose the company you wish to tender shares/ apply for buyback

    ◦ Mouse over the company name, whose shares you wish to tender for buyback.
    ◦ Click on the contextual menu that comes up (a blue bar with three white dots in it), and click “Place Order”.

  3. Enter the desired number of eligible shares you wish to tender for buyback

    ◦ In the next pop-up that comes up, enter the number of shares you wish to tender for buyback, and click “Submit”

  4. Done!

    ◦ You will see an “Order Received” message next to the company name.
    ◦ That is it. The buyback application/tendering process is now complete.

Conclusion

That is it. The tendering/buyback application process is now complete from your end. All you now need to do is to wait until the company (carrying out the buyback) completes the buyback process. Post the same, the investor will be informed of how many shares have been bought back by the company. Post the same, the unaccepted shares will be returned to the demat account of the investor, and the amount (for the accepted buyback shares) will be credited to the bank account mapped with Zerodha for the Equity trading account of Zerodha.

If you like this article, you might like out the other how-to guides on this website.

All the best in your investment journey! Best wishes to you!

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How to Apply for Mutual Fund New Fund Offer (NFO) through Zerodha Coin

Zerodha Coin | NFO | Mutual Funds New Fund Offer | Mutual Funds NFO

Introduction:

You have probably come to this article wanting to apply for the latest NFO (New Fund Offer) through Zerodha Coin. This NFO, may have been announced by your favourite Mutual Fund House OR your friend/colleague has tipped you in on the latest NFO that is expected to do well. Either way, read on!

So, can you apply for the NFO (New Fund Offer) through Zerodha Coin?

Answer: Yes, you can apply for NFO (New Fund Offer) though Zerodha Coin through a simple six-step process, listed below, that will take a maximum of 20 minutes of your time.

What is a New Fund Offer (NFO)?

Before we start, you might have a basic question. What exactly is a New Fund Offer? To state it simply, a New Fund Offer can be explained as the first subscription opportunity for any new mutual fund announced by any of the Mutual Fund Houses/Asset Management Companies in India. There is a window period, wherein potential investors can apply for the NFO.

New Fund Offerings could be either

  • Close-ended funds (where the mutual fund can be applied for ONLY during the application period, and the mutual fund closes for any fresh cash inflow, and the investment, and redemption rules are carried out as per the scheme document), OR
  • Open-ended funds (where the mutual funds after the initial NFO period opens up for regular investments, whether lump-sum, or Systematic Investment Plan i.e. SIP method).

Think of an NFO like an IPO (Initial Public Offering) for a mutual fund.

Pre-requisites before we start to apply

Before we start, we assume the following points:

  • You have a demat account with Zerodha Broking. The Zerodha demat account number is in a 16-digit format: 12081600 12345678, where the first 8 digits (viz. 12081600) are of Zerodha DP ID, and last 8 digits (viz. 12345678, in this example) are the Customer ID.
  • You have adequate balance in your bank account (mapped with Zerodha) to ensure that the NFO amount can be deducted at the pre-decided timelines, and
  • You gone through the Scheme Offer Document, to ensure that the objectives of the offered mutual fund scheme are aligned with yours. Please do not go on peer pressure. Assess whether the declared mutual fund rationale aligns with your objectives, and only then apply for the NFO.

Detailed How-to Guide on the NFO Application Process

Time needed: 20 minutes

  1. Login to Zerodha Coin Website

    Go to the Zerodha Coin URL viz. https://coin.zerodha.com/, and login with your Zerodha credentials.

  2. Navigate to the Mutual Funds module in the dropdown under the Dashboard, at the top left.

    – At the top left of the screen, click on the Dashboard, and select Mutual Funds

  3. Navigate to the “Explore” module under Mutual Funds

    – Click on the Explore option. Mostly probably the default selected option is “Holdings”. Select “Explore”.i.e. the option to the left of “Holdings”.

  4. Next, click on the “Apply Now” option at the bottom left

    – Click on the “Apply Now” button at the bottom left i.e. the Blue button.

  5. Scroll to the desired mutual fund NFO you wish to apply for

    – The list opens to a scrollable list of all the NFO that is presently in the subscription window.
    – Pro-tip: If you click on the name of any mutual fund NFO, the Scheme Information Document will open in a new window with all the details of the selected fund. This should help you with any detailed information for the mutual fund.
    – Scroll to the Mutual Fund NFO you wish to apply for.

  6. Enter the desired amount you wish to invest, and click “Place Order”

    – Here, enter the desired amount you wish you invest, and click “Place Order”.
    – Do note that you can go back, and either modify the desired investment amount OR delete the order altogether anytime during the subscription period.

  7. Done!

    – That is it! You are done with the application process.
    – Just wait until the declared timelines, and the Mutual Fund House will first deduct the desired amount from your account, and later issue the mutual fund units, as per the NAVs.

Conclusion

So that is the detailed process to apply for any ongoing New Fund Offer (NFO) being offered by any of the mutual fund houses. However, as stated earlier, please go through the scheme offer documents, to ensure that the investment outlook, and expectations are aligned with yours (as an investor).

Best wishes on your investment journey!

How to generate and download HDFC Bank Deposit Slip

How to download HDFC Bank deposit slip
How to download HDFC Bank deposit slip

Introduction :

This article lists the steps to get an soft copy of the HDFC Bank deposit slip. You can get two versions of the deposit slip, either (a) pre-filled, OR (b) blank HDFC Bank account deposit slip ..

Before you start to download the Bank Deposit Slip

We assume the following:

  • You have a bank account with HDFC Bank
  • You have net banking facility activated for the HDFC Bank bank account in question.

Step-by-step guide to generate and download the HDFC Bank Deposit Slip

Time needed: 15 minutes

Step-by-step guide to generate either (a) pre-filled , or (b) blank deposit slip ..

  1. Login to the HDFC Bank Netbanking portal

    a. Go to the https://netbanking.hdfcbank.com/netbanking/.
    b. Login with the User ID/Customer ID, IPIN/Password, and Secure Access Image/ Message.

  2. Navigate to the appropriate tab under the “Request” section under “Accounts”

    a. Under “Accounts”, click on “Request” to expand the option, and choose the “Download Deposit Slip” option..

  3. Choose the type of the Deposit Slip needed

    a. Choose the type of deposit slip needed. viz. whether (i) Blank Deposit Slip, or (ii) Pre-printed Deposit Slip/Pre-filled Deposit Slip
    b. If you desire Pre-printed Deposit Slip, then you can choose the bank account number from the drop down list in the “Select an account” option.

  4. Accept the terms and conditions.

    a. Here, click the checkbox, indicating that you accept the terms and conditions.

  5. Click “Download”

    Next, click “Download” to download a PDF copy of the deposit slip, that may be printed, and used, while performing the in-person transactions at the HDFC Bank branch.
    Sample of the same is below HDFC Bank Deposit Slip

  6. Done!

    You now have a PDF copy of the deposit slip, Feel free to print multiple copies, and/or take photocopies of the same to use in the branch for in-branch transactions.

Conclusion.

So, that is it. These are all the steps you need to generate the deposit slip, that can be used for all your in-branch physical transactions at the Bank.. You may printout a copy, and then use photocopies to use at the branch, whenever you next visit for in-branch transactions. Now, there is no frantic search for the slips, when you step into the branch. You may fill in the slips in the convenience of your home, and visit the branch for the transaction only.

Check out other how-to guides, and info-wiki articles on webnotes.in.