How Can You Reactivate Your Dormant Demat Account?

Opening a Demat account allows you to invest in a range of securities, including stocks, bonds, derivatives, and commodities. It also marks your entry into the world of financial markets.
However, if you stop using your Demat account for a certain time, it becomes dormant. To reactivate it, investors must follow some steps and submit crucial documents. This blog guides you to reactivate your dormant Demat account by providing a step-by-step process and tips to keep your Demat account active.

Understanding a Dormant Demat Account

Before jumping into the steps of reactivating the inactive Demat account, you must know the dormant Demat account meaning. A dormant Demat account is a Demat account that is inactive or has not been used for 12 months.
For example, on April 1, 2025, X creates a Demat account, and on April 15, 2025, he buys some shares. After that, X does not buy or sell anything using the associated Demat account till April 1, 2026. The depository participant (DP) that holds X’s Demat account has the authority to designate the account as dormant or inactive once it has passed 12 months. It means that until you reactivate your account, you will not be able to access or use it.

Why Do Demat Accounts Become Dormant?

The appropriate depository participant notifies the Demat account holder when a Demat account is considered dormant. Aside from not using it for 12 months, there are other reasons why a Demat account becomes dormant.

If investors have not sent the necessary paperwork to the broker or DP, it can result in a dormant Demat account. In addition, their Demat account can become dormant if they have not updated their Know Your Customer (KYC) information.

Limitations of a Dormant Demat Account

If your Demat account turns inactive, you cannot avail services related to your investments. These are some of the limitations of a dormant Demat account:

1. Paying Unnecessary Charges

If you have not used your Demat account for 12 months, you have to keep paying unnecessary charges like annual maintenance charges (AMC).

2. Risk of Fraudulent Access

You might face some risks of misuse if an unauthorised person gets access to your dormant Demat account. They can even sell the securities that you hold in the Demat account without your consent.

3. Unable to Trade

You cannot place buy or sell orders if your Demat account becomes dormant.

Documents Needed for Dormant Demat Account Reactivation

If you want to avoid the aforementioned risks of a dormant Demat account, you have to reactivate it. Below are the documents required to reactivate your Demat account, which has been inactive for less than 24 months:

1. Copy of PAN card
2. Valid address proof

Below are the documents required for reactivating accounts that have been dormant for more than 24 months:

1. Copy of valid address proof
2. KYC form
3. Copy of bank statement
4. Latest passport-size photos

Procedure to Reactivate a Dormant Demat Account

If your Demat account is considered dormant, you must reactivate it to avoid paying unnecessary fees. You must follow the step-by-step procedure for reactivation if your Demat account is dormant for 12 to 24 months:

1. Log in to your DP account.
2. Pay all the outstanding dues in your account.

Follow the steps below if your account remains inactive for more than 24 months:

1. Complete the KYC verification process.
2. Submit the aforementioned documents like the KYC form, copy of valid address proof and bank statement, and latest passport-size photographs.

In both cases, it will take 7 to 10 working days for your dormant Demat account to get reactivated.

Tips for Keeping Your Demat Account Active

Although your dormant Demat account can be reactivated, you must avoid letting it remain inactive. Here are some crucial tips to keep your Demat account active:

1. Make at least one transaction each month, such as buying, selling, transferring, or pledging securities.
2. Update your KYC information and supporting documents whenever your personal or financial details change.
3. Ensure regular updates to your KYC details.
4. Pay all necessary charges related to your Demat account on time.
5. Before the account is marked dormant, perform periodic trades and stay in touch with your DP.

Final Thoughts

Reactivating a dormant Demat account is useful for avoiding unnecessary fees. The reactivation is a quick and simple process. All you have to do is get in touch with your broker or DP, fill out a form, send in your paperwork and KYC, and wait for confirmation.
Want to start your investment journey by opening a Demat account? Download the PL Capital Group – Prabhudas Lilladher application to open an account for free! We offer the best services for investing in stocks, mutual funds, and derivatives.

Frequently Asked Questions

1. Why do Demat accounts become dormant?

Your Demat account may become inactive mainly due to inactivity for 12 months. In addition, if you have not sent the necessary paperwork to your DP or have not updated your KYC information, then your Demat account also becomes dormant.

2. What are the advantages of reactivating an inactive Demat account?

If you reactivate your dormant Demat account, you can use your linked trading account to buy and sell different types of securities and secure them from fraudulent activities.

3. Is it possible to open a new Demat account if I have an inactive Demat account?

Yes, you can open a new Demat account if you have an inactive one. However, you should try to reactivate the older one if possible.