Finance

How to Convert Physical Shares to Demat

The number of shares you have in the stock market could be a lot, and you may have liked to hold them in the physical space. But there is a virtual world where you can safely hold digital assets with many conveniences.

Demat accounts are the digital counterpart of your physical stock market assets. They store the same value but in a digital location. If you have decided it is time for your physical shares to enter this virtual world, read on to understand how you can convert them into dematerialized or Demat accounts.

Also, Read: Everything You Must Know About the Concept of Equity Shares

What is a Demat Account?

A Demat account is for investors to hold their shares or other securities. The account operates in the investor’s name and remains linked with the depository participant (DP) that opened it.

The investor has full control of their account and can transfer money into and out of it any time they want. They also have complete control over who has access to the account, which means they can grant different levels of access to different people.

The main advantage of dematerialization or Demat accounts over holding paper certificates is that it saves space—you do not need to keep storing those certificates somewhere safe. In addition, with a Demat account, you get real-time updates about your investments, such as price changes. You can also keep a record of all transactions made within the account.

Physical Shares to Demat Conversion Process

To convert your physical shares into Demat form, you will need to follow a few steps. You will have to open a Demat account, raise a request for share dematerialization, and share necessary documents. Let’s look at each step.

Opening a Demat Account

Here are the steps to open a Demat account with a depository participant (DP).

Visit the DP’s website and check the Demat account opening section.
Fill out the application form by sharing the necessary details.
Attach the scanned copies of the document for the KYC process.
Sign the online agreement with the DP, which lists your rights and duties of opening a Demat account with the DP.
Post the successful verification of your details, the DP will open your account and share the credentials to use the trading portal.

Request for Share Dematerialization

You can raise a request for dematerializing your shares after opening your Demat account. Here are the steps you need to follow.

Request your DP for the Dematerialization Request Form (DRF).
Add the necessary and submit the signed document copy document to the DP.
The DP will process your request after verifying the details and physical share certificates.
Post the completion of all the necessary steps at the DP’s end, your physical shares will get dematerialized.

Documents Needed to Convert Physical Shares into Demat Form

Here is a list of documents you will need to submit to your DP to convert physical shares into Demat form.

Identity proof like PAN card, Aadhaar card, driving license, voter ID.
Address proof like passport, lease agreement, electricity or telephone bill, house maintenance bill, etc.
Bank account statement or scanned copy of passbook.
Original copies of physical share certificates you hold currently.
Filled Dematerialization Request Form.

Benefits of Holding Demat Shares

Dematerialized shares offer the following advantages over the traditional stock certificate.

Safer for Investors and Issuers

Dematerialized shares are held in a secure digital system, which means they cannot be lost, stolen, forged, or counterfeited. This makes them a much safer way to store assets than physical paper certificates. And since dematerialized shares do not require any physical storage space, they are also easier to handle than paper certificates.

Easier to Transfer Between Parties

Because of their digital nature, it is much easier to transfer dematerialized shares between parties than it is to transfer physical certificates. You can trade dematerialized shares more freely than you could before.

Bottom Line

If you are planning to convert physical shares to Demat, you need to go through the steps mentioned above. You can also contact the concerned DP regarding the same, and they will guide you through the process. If you are looking to open a Demat account, Choice India can help you. Visit our Demat account opening section for more details.