Shares may also be transferred from one Demat account to another. It aids in share consolidation, which makes it simple for a shareholder to view all of his shares at once.
Trading with a Demat account is equivalent to conducting transactions via a bank account. The sole distinction is that shares are transferred using the Demat account instead of cash.
When you purchase shares, our Demat account is credited; however, the account is debited of the securities when you sell shares.
You could want to move shares between Demat accounts. There could be several motives for doing so. Among them are-
- You might wish to switch to a full-service broker to boost your trading volume to receive more daily reports and advice.
- The shares could be better off in separate accounts. Long-term plans like retirement, a child’s education, or marriage are the usual reasons for doing this.
Steps of transferring shares from one Demat account to another
The core procedure for transferring shares across Demat accounts is summarised below-
- The investor completes and submits the DIS (Delivery Instruction Slip) to the present broker.
- The broker sends the Depository the DIS form or request
- Your current shares will be transferred to the Demat account by the Depository
- The transferred shares will appear in the investor’s new Demat account once all of the shares have been transferred
- Both physical and online transfers are available for all shares
Knowing certain requirements when transferring shares manually between Demat accounts is crucial.
For offline share transfers, you must use the Debit Instruction Slip booklet that your DP has issued. A few required fields on the DIS must be completed to transfer shares.
It is crucial to understand that transferred shares are kept and stored in depository systems.
Start by accurately entering information such as the names of the shares you desire to transfer, their matching ISIN numbers, the recipient’s name to which you want to transfer the shares, the client ID, etc.
National Securities Depository Limited and Central Depository Services Limited are the two depositories in India authorized to keep the account holders’ shares.
A delivery instructions slip, also known as a DIS, is sent to an investor when he opens a Demat account with a stockbroker along with the welcome package. The investor must complete the form or slip while applying offline.
The investor is given a 16-digit ID assigned by the broker. The existing and new brokers’ IDs must be included in the slip. It is also known as the Beneficiary Owner ID and is the broker’s ID (BO ID).
International security identification number
The ISIN, or International Securities Identification Number, has 12 digits. It serves as a unique identification number for your shares in the Demat account.
Identification of securities such as stocks, shares, notes, bonds, funds, etc., is aided by it.
The ISIN number must be entered accurately because it will be used to process transactions. Along with information about the shares and their amount, it should be provided in the slip.
Mode of transfer
This is a crucial stage because it entails choosing the transfer mechanism. The “off market transfer” option must be selected if the transfer is intra-depository.
If not, it will be an “inter-depository transfer.” Select the “inter-depository” column if the mechanism of transfer is inter-depository.
When choosing this option, it is crucial to use caution. The “off-market transfer” column must be chosen if the transfer mode is intra-depository or off-market.
The stockbroker’s or depository participant’s name must be stated. After clearly filling out all of the form’s fields, you must sign the document at the bottom. The signature must be an exact match to the one on file with the DP.
The account holder’s current broker must receive the completed and signed DP slip. Choosing which shares to transfer to the new Demat account may take a day or two.
Transferring the shares to the investor’s account with the new broker will take a few days. The fees the existing broker may impose for this operation vary from broker to broker.
The sum could differ from one broker to the next. The broker cannot impose any costs if you close the Demat account.
The relevant shares must be transferred from the previous Demat account by the current broker to the new broker, and this process will take 3-5 business days.
Things to keep in mind while transferring the shares from one Demat account to another
- The new DIS must be returned to the broker if the investor wishes to shut the Demat Account.
- The investor can be charged for this process by their current brokerage. From broker to broker, the fees differ.
- This method is cost-free if the investor plans to close their Demat account with their current broker.
Online share transfers across Demat accounts are simple by CDSL’s EASIEST function. The account holder must register on the CDSL website. The form needs to be filed to the DP after it is finished.
The choice of a facility called “Easiest- electronic accessibility to securities information and implementation of secured transactions” is the next step.
The account holder will then be permitted to make subsequent transfers after the DP has finished the verification procedure.
Here are the following steps that need to be followed:
- To register his name, the investor must click the “Register Online” option on the CDSL or NSDL website. The ‘Register Online’ link needs to be clicked after the CDSL website has been viewed.
- The form must then be filled out with the necessary information.
- The investor can print it out and give it to the Depository Participant.
- The option to “Print Form” must be chosen once the form has been filled out.
- The DP then handles the remaining aspects of the situation. He checks the investor’s completed paperwork. The form will be transferred to the account holder’s DP after printing.
- A password will be given to the account holder’s email address once the DP has completed the form verification process and received an email to his registered email address.
- The account holder can log in and start transferring the necessary number of shares on their own by using the specified password.
Amit Gupta is the creator of FreeDematAccount.in, a website that specializes in Demat accounts and provides assistance to all its users in navigating through complicated decisions. After completing his high school certification, Amit spent half a decade learning about Demat accounts from brokerages. Before forming FreeDematAccount.in, Amit worked for a Demat account brokerage.