It is mandatory to have a Demat Account to invest in the stock market or Mutual Fund. Cannot invest in it without a demat account. If the investor does not use the demat account for a long time, his account may be closed.
Even if the account is not active, the investor will still have to pay the maintenance fee. If you also do not use the demat account for the long term, then you should close it to avoid unnecessary expenses like maintenance fees.
After how much time does the demat account get closed?
According to the rules of the National Stock Exchange (NSE), if there is no trade of any kind from the trading account for 12 months i.e. 1 year, then the account becomes inactive. The stock broker deactivates that trading or demat account. Let us tell you that the rules made by NSE are applicable to other stock exchanges also.
Even after the demat account becomes inactive, the account holder has to pay account maintenance charges. To avoid such unnecessary expenses, many experts recommend that if the demat account is not being used then the account should be closed.
How to close a demat account
If you have shares in your demat account then either sell them or transfer them to another demat account. After this, settle the account by paying whatever charges or fees have not been paid.
Now take the account closure form from the Depository Participant (DP) and fill that form. With this form, you will have to attach documents like a PAN Card, address proof, and ID-proof. Now after submitting the document the closing process will be done.
How to reactivate the demat account
If the demat account is closed, then to reactivate it, a request will have to be made by calling or emailing the stockbroker. You will have to request to reactivate the account. After accepting the request, you will get OTP verification.
If the demat account is closed for more than 24 months i.e. 2 years, then you may have to get KYC and in-person verification done. The process of activating an account can be lengthy.
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