A Demat account allows one to trade in the stock market. It opens several investment avenues. It is mandatory to open a Demat account with a registered broker to start trading. The free Demat account opening process is simple and hassle-free. One needs to submit some basic identity and address proof to complete the account opening procedure.
Post the creation of the Demat Account, one can dig deeper and explore the various features and facilities offered. A trader can also transfer the shares from one Demat account to another. Transferring shares enables one to consolidate shares in one place. It makes it easy for a trader/investor to get a complete overview of the shares as and when required.
Here are various situations wherein an investor can opt to transfer shares from one account to another:
- Bring all shares under one proof: Maintaining records of multiple Demat accounts can be stressful and time-consuming too. Bringing all the shares under one roof can make it easy for an investor to track, analyze and evaluate shares.
- Changing depository participant: An investor or trader may also go for a transfer of shares in case the person is not satisfied with the depository participant. Transfer of shares enables one to change the depository participant and select the one with good returns.
- Experience: An investor may also think of transferring shares from one Demat account to another if he/she is not satisfied with the current broker. Some bitter experiences may trigger one to initiate a transfer of shares.
- Investment goals: The investment goals and objectives one a person differs rules their decision. Hence, one may get the transfer of shares to explore some other investment. An investor or trader may want to shift from a discount broker to a full-service broker. This kind of shift is generally observed in people who like to take a risk and try different alternatives.
Participants in Transferring shares from one Demat account to another
- Current Broker
- Investor
- New Broker
- Depository, i.e., NSDL and CDSL
Process of transfer of shares from one Demat account to another
The following is the process of transfer of shares from one Demat account to another
Step 1 – An investor will have to fill DIS Delivery Instruction Slip and submit the same to the current brokerage company.
Step 2 – The broker will now forward the DIS request to the depository
Step 3 – The Depository will acknowledge the DIS and imitate the transfer of shares from the existing Demat account.
Step 4 – After the transfer of shares, one can view the shares reflected in the new Demat account holding section.
Also check out – How to close a Demat account
Manual Transfer of Shares
An investor can commence the transfer of share process manually too.
At the time of Demat account opening the account holder is given an instruction slip or DIS. The account holder needs to fill the slip and submit the same to the stockbroker’s office to initiate a transfer of shares process.
Following are the details one must provide to transfer shares:
- Target Client Id
- ISIN
- DP name
- Inter depository
- Off Market
After filling and submitting the DIS, an investor will get an acknowledgment receipt from the stockbroker. Moreover, the current stock brokerage company may charge the account holder for the transfer of shares.
Online transfer of shares from one Demat account to another
An investor can also transfer shares from one account to another.
Here are some steps for the same:
- The investor will have to visit and register on the CDSL/NSDL website.
- Then, one must select the option easiest- electronic access to securities information and execution of secured transactions for the transfer of shares
- Provide personal details
- Fill out the form, take a printout of the same and submit the same to the Depository Participant.
The Depository Participant will handle further proceedings post the verification of the form. The email notification will be sent on the registered email ID for the transfer of share tracking process.
Also Read: 7 Mistakes You Should Keep Away With Your Finances
