How to Open a Joint Demat Account?

A joint Demat account is a type of Demat which allows multiple investors to use a single account to trade or invest in securities. As an investor, you can add your spouse, family member or any other individual as an additional account holder.

All the holders in a joint account can hold their stocks and other securities in a dematerialised form, and purchase or sell them. Read this blog and uncover the process of opening a joint account, its benefits and more.

Definition of a Joint Demat Account

This type of Demat account is designed to be used by multiple investors, where the securities are equally shared between the account holders. For example, if you add your spouse to your Demat account as a joint holder, both of you can manage, trade or invest in collaboration.

However, you can have a maximum of 3 joint holders in a Demat account you created with your Depository Participant (DP). There will be one principal account holder, and the other two are considered secondary account holders.

What is the Process to Open a Joint Demat Account in India?

Similar to opening a single Demat, you can open a joint Demat account online, depending on your DP. Take a look at the following steps and open a joint account easily:

Step 1: Look for a reliable DP, such as a brokerage firm, a bank or other financial institutions. Depending on your chosen DP, you can apply for a joint Demat online or visit their physical office.

Step 2: Both principal and secondary account holders must fulfil KYC verification. Provide ID and address verification documents and fill out a joint account opening form, and submit.

Step 3: For authenticity, your DP might ask for an In-Person Verification (IPV). Most DPs provide this facility online, through a video KYC, making it convenient and time-saving.

Step 4: Choose the type of a joint Demat account. Usually, there are two types of joint accounts, like “jointly” or “anyone or survivor”. Select as per your preference and proceed.

Step 5: Choose a nominee for your joint account to pass the account holdings in case of an unfortunate event.

Step 6: Upon successful verification of the application form and the key documents, your DP will create the account. You can now transfer funds and trade or invest in the market jointly.

How to Add a Joint Holder to an Existing Demat Account?

As an investor, you must have a Demat account and wonder how to open a joint Demat account. You can modify your existing Demat account using the steps below without switching your DP:

Step 1: Navigate to the official website of your DP and obtain an account modification form.

Step 2: Produce the key KYC documents of the joint holder you want to add, like their PAN details, Aadhaar Card, contact details, etc.

Step 3: Your DP might ask for additional documents, such as proof of address and a photograph of the new holder. Affix these documents with the application form and proceed.

Step 4: To open a joint Demat account, the new account holder must complete an IPV. Most DPs have the facility for a video KYC to complete this process from anywhere.

Step 5: Update the nominee, if required. After verification, your DP will convert your single Demat account to a joint account.

Required Documents to Open a Joint Demat Account in India

Take note of the following documents to produce when opening a joint account with other investors:

• You must produce PAN cards of all the holders in a joint account.
• Produce a valid address proof, like a copy of the Aadhaar Card.
• Depending on your DP, produce a cancelled cheque and passport-size photographs of the holders.
• Add correct nominee details if you want to add or update the nominee of the account.

What are the Advantages of Opening a Joint Demat Account?

Now that you know how to open joint demat account, you must know the benefits you can enjoy with it. Take a look below and learn its advantages for investors:

1. Collaborative Investment

With a single account, you have to make all the investment and trading decisions by yourself. A joint Demat account offers a collaborative investment platform and makes it easy to pool financial resources for investments and make informed decisions.

2. Shared Account Management and Convenience

In a joint Demat account, both the principal and secondary holders have equal access to the account. With an additional investor, you can efficiently manage portfolios and investments collectively.

3. Proper Investment Management of Family

You can open a joint account with your parents, spouse and other family members and make investments and trading beneficial for them. With a joint account, your family can participate in investment decisions, work together during trades or investments and manage the portfolio better.

4. Planning a Contingency

In case of the untimely demise of the primary account holder of the joint Demat account, the option of “Anyone or Survivor” allows the secondary holders to gain access to the account. Also, the nomination facility ensures the passing of wealth from investments to the next generation.

Conclusion

A joint Demat account is similar to a joint bank account, which allows adding members and access to invest in collaboration. Opening a joint account is easy, and DPs often provide this service online. All you need to do is produce all the necessary documents of the investors to add and complete the IPV process.

FAQs:

1. What happens to the joint Demat account if one account holder passes away?

When opening or applying for a joint account, there is an option to choose an “Anyone or Survivor” account. In this case, if a joint holder passes away, the remaining holders become the owners of the Demat account.

2. Can I open a Demat account with a joint account?

Yes, you can open a Demat account and add other investors as secondary holders to it. Contact your DP for this service and complete the joint account opening process online or offline.

3. Who is liable for taxes in a joint demat account?

Even if you are opening a joint Demat account with other investors and the others can invest or trade in securities, only the principal account holder is liable for taxes. Therefore, if you are the principal account holder, you must pay taxes on profits or income from investments.