Primary objective of demat account is to keep financial instruments i.e. shares, ETF or Mutual funds in safe custody in electronic form. It is also very much possible people have multiple demat accounts, as in earlier days, only full-service brewers were active but now discount brokers are dominating in the stock broking industry providing better trading platforms.
Also Read: How to Choose the Best Trading Platform in India: Points to Check
Hence, many investors don’t bother to close or use their existing demat account, instead, they open another one with a new broker. Such investors have the holdings of shares in older demat accounts and now bought the securities in the new demat account with two brokers. And now looking to merge or transfer the shares from one demat account to another one.
Can we Transfer Shares from One Demat Account to Another?
There are only 2 major depositories in India- one is CDSL ( Central Depository Services Ltd) and other one is NSDL ( National Securities Depositaries Ltd). Only these two entities have the authority to open Demat account in India. Your depository participant (DP) must be a registered member of both these depositaries and either any of them to open a demat account on their client’s behalf to keep securities held.
If you have opened two demat accounts with different brokers with the same depositories or two demat accounts with different brokers with different depositaries you can transfer the shares from one demat to another demat account through manually (offline)or online method.
It takes some time to carry out and complete the share transfer process and that totally depends on which mode of share transfer you follow. And if it is necessary or you really need to transfer the shares into a new demat, then only get involved in such a procedure.
Why You Need to Transfer the Shares from One Demat to Another Demat Account?
Multiple reasons i.e. shifting of broker, convenience, low broking charges can be the primary cause of shifting shares from one demat account to another however now a day’s many clients also keep shifting their shares to access margin benefits in intraday trading.
Another reason could be low annual demat charges or trust issue with current broker however pricing doesn’t play a crucial role for shifting shares from one dp to another.
How Much Time Does it Take to Transfer Shares from One Demat Account to Another?
Well it depends on the way client choose to transfer their shares. Mainly there are 2 ways to transfer- manual and online. Through manual mode share transfer is time taking process and it may take 7-10 days to complete entire process. On the other hand electronically or in online mode transfer process is quite simple and less time consuming. Entire process will take hardly 4-5 days with proper verification of documents. Of course pricing structure is quite different in both ways.
Procedure to Transfer Shares from One Demat to Another
As we have already told you you can transfer your demat account through two modes – offline or manual transfer and online transfer procedure. And below you can find step-wise guidance for manual as well as online share transfer to another demat account.