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How To Close a Demat Account Online?

How To Close a Demat Account Online?

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Closing a Demat account online is an important decision for investors who no longer use their Demat account. It is essential for people who wish to avoid unnecessary fees. While Demat accounts are essential for securely holding and trading securities, they can also have hidden charges and annual maintenance fees when they’re inactive. To protect your finances, it’s crucial to understand how to deactivate a Demat account. However, you may wonder how to close my demat account. This article provides a comprehensive, step-by-step guide on how to close a Demat account online. You can follow the guidelines and ensure efficient management of your Demat account to safeguard your financial resources. Now let’s understand how to close Demat account online in detail.

Types of Demat Account Closures

You must understand how to delete Demat account before initiating the procedure. It can be done in two ways, as mentioned below.

  • Account closure: When there are no pending payments or holdings in the investor's account, you can request the depository partner (DP) to close the Demat account online. 
  • Transfer and account closure: If the investor has any securities in their Demat account he must transfer them to another Demat account.

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Table of Content

  1. Types of Demat Account Closures
  2. The Process to Close a Demat Account in Case Of Account Closure
  3. Closing Demat Account in Case of Transfer
  4. Documents Required to Close a Demat Account
  5. Other Details Required While Closing Your Demat Account
  6. Why You Should Not Close a Demat Account

The Process to Close a Demat Account in Case Of Account Closure

In the case of Demat account closure online, follow the below steps.

  • Step 1: Visit the website of your depository participant (bank or investment agency) and download the Demat account closure form. The Demat account closing letter format may slightly vary with different brokers.
  • Step 2: Fill out the form accurately and submit it with your KYC documents. Verify that all the documents provided are valid. In this step, you must physically submit the forms and documents to the nearest DP office or mail them to the relevant head office.
  • Step 3: An official from the DP must witness both individuals signing the closure form if more than one person holds the account.
  • Step 4: Make sure the account does not have any shares or a negative balance. You can check this by logging into your account.

Closing Demat Account in Case of Transfer

Here are the steps to close a Demat account online in case of a transfer.

  • Step 1: The NSDL and CDSL are India's national depositories. For intra-depository transfers, an Intra DIS slip is required. Then select the 'Off-Market Transfer Option' in the Demat account.
  • Step 2: Next, obtain the original client master list (CML)from the account with the logo, stamp, and signature.
  • Step 3: The completed form must be submitted along with the names and ISINs of the shares you wish to transfer. It is also necessary to specify the target client's ID, which is a 16-character number.
  • Step 4: Now; the documents must be submitted to your DP's office or mailed to their headquarters.
  • Step 5: Additionally, a bank official must verify the self-attested Demat closure form before it can be closed.

Documents Required to Close a Demat Account

To  how to close Demat account different types of investors like joint holders, minors, or HUF account holders will have to provide some essential documents. Here is the list of all the documents an investor has to submit. 

Joint Holders Without Securities

  • Account closure form, signed by all joint account holders.

Joint Holders with Securities 

  • Account closure form, with signatures from all joint account holders.
  • A Client Master List (CML) copy from the depository participant (DP) where the securities will be moved. This CML copy must be signed and stamped by the receiving DP.

HUF (Hindu Undivided Family) Without Securities

  • Account closure form, signed by the Karta (the head of the HUF), along with the HUF’s official stamp.

HUF with Securities

  • Account closure form, signed by the Karta, including the HUF stamp.
  • A CML copy for the HUF account to which the securities will be transferred. The CML copy must be signed and stamped by the receiving DP.

Minors Without Securities

  • Account closure form, signed by the minor’s guardian.

Minors with Securities

  • Account closure form, signed by the minor’s guardian.
  • A CML copy for the minor’s account where the securities will be transferred. This CML copy must be signed and stamped by the receiving DP.

Other Details Required While Closing Your Demat Account

Before starting the closure process, it is essential to review and examine your account and make sure it meets the following requirements.

  • You must withdraw or transfer any debit balances from your account before initiating the process.
  • There should be no active SIPs, mutual funds, or bonds associated with the Demat account. In this case, a transfer and closure request would be more appropriate than a straightforward one-step closure request.
  • Verify that the account does not have a balance. Any negative balance resulting from settlements or broker fees must be paid before the Demat account can be deactivated.
  • At the scheduled closing time, all open positions, including stock holdings, option positions, and futures contracts, should be closed. If you want to keep such positions, you should either square them off or move them to another Demat account.
  • You should Dematerialise any inactive ISINs for shares that are no longer traded. If your account contains any of these shares, you should notify your broker immediately so that they can be Dematerialised before the account is closed.

Why You Should Not Close a Demat Account

Here are some key reasons why you should not close a Demat account.

  • Opening a Demat account facilitates trading securities and ensures secure storage of assets.
  • Consider closing a Demat account if it doesn’t hold any stocks to avoid incurring charges for dormant accounts.
  • Stay open to investment opportunities in the diverse investment landscape.
  • Think twice before closing a Demat account after selling your stocks, as markets can transition from bearish to bullish unpredictably.
  • Demat accounts store various securities, including shares, ETFs, government securities, and bonds.
  • Keeping a Demat account active can be beneficial, especially for long-term holdings, as securities appreciate over time.

Conclusion 
The Demat account app is essential to streamline the stock market investment process. If you're looking to close a Demat account online, You can obtain the Demat account closing letter and provide personal details, and account number, along with a statement confirming the transfer of any holdings or settlement of dues. Check the account for overdue charges, penalties, or pending shares, and confirm whether the details are correct. Also, whenever shares or accounts are transferred, the individual's details must be verified to avoid mistakes. You can download the BlinkX trading app to learn more about trading in the stock market.

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FAQs on Demat Account Closure Online

In a few simple steps, you can close your Demat account in person. Visit the DP's office and submit the Demat account closure form along with all the required documents. In most cases, your account will be closed for good within seven to ten business days.

If you don't use your account and don't close it either, it will become dormant after a while. If you need to use it again, you will need to contact the DP to reactivate it. Moreover, you could become the victim of fraud, scams, and other forms of misuse if you don't close your dormant account when you're not using it. So, it may be better to close your Demat account permanently if you do not intend to use it.

You will receive a confirmation letter from your DP within 7 to 10 business days of submitting the account closure form. Try logging in once to make sure your account has been closed. Upon closing your account, your Demat account number will cease to exist, and you will not be able to access your account using your login details.

There are no charges for closing your Demat account. Before you can close your Demat account, all pending dues must be cleared.

You will receive a refund from the DP when you close your Demat account or shift it from one DP to another.

To permanently delete your demat account, submit a written request to your Depository Participant or brokerage firm, who will provide the necessary forms and instructions to initiate the account closure process.

Demat accounts can be closed at any time by submitting a closure request to your Demat Department or brokerage firm, but specific conditions and charges may apply, so consult with them.

Unclosed demat accounts can lead to maintenance fees, inactive accounts, and potential risks like unauthorised access or securities misuse. To avoid potential issues, it's crucial to follow the correct procedure to close these accounts.

Demat accounts can be closed online through a Depository Participant's or brokerage firm's portal, but specific requirements and procedures may vary, so consult with your DP for specific closure options.

To confirm if your Demat account is closed, check with your Depository Participant or brokerage firm, who will confirm the closure status and provide the necessary documentation. Review your account statements or contact customer support for further assistance.