A Demat account is similar to a bank account. The only difference is that instead of holding money, a demat account holds shares and securities. When you buy or sell shares, the transfer happens in your demat account. While you can have multiple demat accounts, you cannot have more than one with the same stockbroker. You can, however, transfer shares from one demat account to another.
2 ways to transfer shares from one demat account to another
There are two ways in which you can transfer shares from one demat account to another. The first is the manual/offline transfer of shares, whilst the second is the online transfer of shares.
Manual transfer of shares
This is the traditional method of transferring shares from one demat account to another. It involves the following steps:
- Make a note of the shares that are to be transferred. Then, record the ISIN (International Securities Identification Number) number. It is a 12-digit code that is used to identify securities such as funds, equities, bonds, stocks, and debts. Ensure that you are noting the ISIN correctly, as the transactions will be processed based on it.
- Now, note the target client ID. It is a 16-character code that includes the ID of the client and the ID of the DP (Depository Participant).
- Next up, select the method of transfer. If the mode of transfer is an intra-depository or an off-market transfer, then the column titled ‘off-market transfer’ has to be selected. If the mode of transfer is inter-depository, then the ‘inter-depository’ column should be selected.
- If your existing and new brokers are both associated with the same depository, i.e. the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), there will be an intra-depository transfer of shares. However, if the existing and new brokers are associated with different depositories, there will be an inter-depository transfer of the shares.
- Once the DIS slip has been filled in, submit it to your existing broker.
- The acknowledgement receipt for the DIS slip must be collected from the broker.
- It will take between 3-5 business days for the existing broker to transfer the required shares from the old demat account and for the new broker to receive the shares in the new account. The current broker may apply a few charges for this procedure, and the rates vary from one broker to another.
Online transfer of shares
This is the quicker of the two methods to transfer shares from one demat account to another. You must visit CDSL’s website, get yourself registered, and fill and submit the form to the DP. Here’s a step-by-step guide to it:
- Register yourself on the CDSL website by selecting the “Register Online” link.
- Then, you need to fill in the form with the required details.
- Select ‘Print Form’ after filling in the form. After the form has been printed, it will be transferred to your DP.
- After the DP has finished the verification process of the form, a password will be sent to your email id.
- Using the provided password, you can log in and begin transferring the required shares.