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.
Manual Transfer Method
Manually share transfer from one Demat Account to Another:
Step 1: for any kind of manual transfer you need a DIS (Delivery Instruction Slip). It is a document that needs to be properly filled with all the required details.
Step 2: You have to mention the Beneficiary Broker IDon the DIS from both of your brokers (existing and new brokers). The ID is a 16-digit unique code allotted to the brokers.
Step 3: Now you have to fill in the International Securities Identification Number (ISIN) which is a unique identification number allocated to each security that helps identify the individual shares into the demat account. You have to mention the ISIN with the number of shares you want to transfer.
Step 4: Here you have to choose between the Intra-depository Transfer and Inter-depository Transfer procedure to complete your share transfer process.
Step 5:If you want to do an Intra-depository transfer, you have to choose off-market, while in another case you need to opt for the inter-depository transfer option.
Note: Depository transfer can be categories in 2 parts- Intra depository and Inter depository. When shares transferred from one demat to another demat account but demat account registered with same depository that is Intra depository transfer. When shares transfer from one demat to another and both account registered with different depository it is called as Inter depository transfer.
Step 6: Before handed over your DIS to your broker please make sure that it will be dully signed by you and there is no signature difference. Here you might be asked to pay some charges for transferring your shares from one demat account to another demat account.
Share Transfer from one Demat to Another Charges
Depending on the depositories and your DP rules and regulations the charges for transferring the shares from one demat account to a different account might differ. Transferring charges and expenses will be also different as per the mode of the share transfer mode you opt for.
Also Read: How to Convert Physical Shares Into Demat: Stepwise Procedure
The charges for transferring the shares from one demat to another demat account online are lower compared to the offline process. The charges for the transfer of shares from one demat account to another demat also depend on the market value of the total shares you want to transfer with additional charges like taxes (18% GST) imposed by the government on such transactions.
Online Share Transfer Procedure To Other Demat Accounts:
Nowadays everything is digitalized, hence share transfer to other demat accounts is also possible and more convenient through online mode. CDSL and NSDL both provide online share transfer facilities to transfer the shares online.For CDSL you can use electronic access to securities information and execution of secured transactions (EASIEST)and for NSDL you have to use the Speed-e facility.
