Do you have a demat account that you no longer use? Many people open multiple accounts with different brokers and later realise that they are only paying extra charges for something they don’t even need. If you are one of them, then learning how to close demat account can save you both money and effort.
In this blog, we’ll explain in simple steps how you can close your demat account online or offline. We’ll also answer common questions like what to do if you still have shares, how long the process takes, and whether you can transfer or deactivate your account instead of closing it completely.
A Demat account, short for dematerialised account, is where your shares and securities are held in electronic form. Instead of keeping physical share certificates, everything is stored digitally, making buying, selling, and holding investments much simpler and safer. In India, a demat account is opened with a Depository Participant (DP), which is usually a broker like lakshmishree registered with CDSL or NSDL.
If you invest in stocks, mutual funds, bonds, or ETFs, you need a demat account to store them securely. Just like a savings account keeps your money safe, a demat account keeps your investments safe. However, if your account is no longer in use, or if you’re paying unnecessary charges, it makes sense to close the demat account and save that money.
Not all demat accounts are closed in the same way. Depending on whether you still hold shares or your account is empty, there are two types of demat account closures:
This type applies when there are still securities left in your demat account. Before closing, you need to transfer them to another active demat account.
Steps to transfer holdings before closure:
Only after completing these steps can you proceed with closing your account.
If your demat account is completely empty, the closure process is much simpler. You can directly apply for closure without worrying about transfers. But before doing that, ensure:
Once these conditions are fulfilled, you can submit the closure request online or offline, and your demat account will be shut down smoothly.
There are many situations where keeping a demat account active doesn’t make sense anymore. Here are some common reasons why investors decide to close their demat accounts:
Closing a demat account isn’t just about saving charges; it’s also about keeping your investments organised and safe.
Closing a demat account can be done in two ways: offline or online. The process may vary slightly depending on your Depository Participant (DP), but the general steps remain similar.
If your DP doesn’t allow online closure or if you have a joint, minor, or HUF account, you’ll need to follow the offline method.
Steps:
Note: If you have holdings, you must transfer them first using a Delivery Instruction Slip (DIS) before submitting the closure request.
Many DPs now offer online account closure, especially for individual account holders.
Steps:
Important: For joint holders, minors, and HUF accounts, online closure is not available. These accounts must be closed offline only.
Before you request closure, make sure you have all the necessary details and documents ready. Missing any of these can delay the process.
Here’s what you’ll need:
If your demat account still has shares or a balance, you cannot close it directly. You must first deal with the holdings before submitting a closure request. There are two ways to handle this:
Option 1: Sell the Holdings
Option 2: Transfer the Holdings
👉 Once your holdings are either sold or successfully transferred, you can move ahead with the closure process—online or offline.
The time taken to close a demat account usually depends on your DP and whether all requirements are met. On average, it takes 7 to 10 working days after submitting a complete closure request.
If there are pending dues, incomplete forms, or untransferred shares, the process may get delayed. That’s why it’s always better to clear all balances, provide correct documents, and double-check your closure form before applying. This ensures a smooth and faster closure process.
Yes, you can transfer shares from one demat account to another, and this is quite common when switching brokers or consolidating multiple accounts. There are two main ways to transfer shares:
🔹 Intra-Depository Transfer (Within Same Depository)
🔹 Inter-Depository Transfer (Between Different Depositories)
Steps to Transfer Shares Before Closure:
Yes, you can temporarily deactivate your demat account instead of closing it. This is called freezing a demat account. When frozen, your account remains active but you cannot make any transactions—no buying or selling of shares.
Deactivation is useful if:
The good news is that most Depository Participants (DPs) do not charge any fees for closing a demat account. However, there are some costs you should be aware of:
Many investors face delays or rejection of their closure request because of small mistakes. Here are some common ones you should avoid:
Closing a demat account may sound complicated, but in reality, it’s a simple process once you know the right steps. Whether you choose the online or offline method, make sure your holdings are cleared, dues are paid, and documents are in place before applying. If you no longer use your account, learning how to close demat account online or through the offline route can save you from paying unnecessary charges and help you keep your investments safe and organised. Taking timely action ensures peace of mind and a clutter-free financial journey.
Yes, if you have an individual demat account with a DP that supports online services, you can close it directly through their portal. The process usually involves logging in, selecting the closure option, completing all pending settlements, and e-signing the request with Aadhaar. However, joint accounts, minor accounts, and HUF accounts still require an offline closure.
No, you cannot close your account if it still has holdings. You will first need to either sell your shares or transfer them to another demat account. Once the account is empty, you can proceed with the closure request.
If you leave your demat account unused, annual maintenance charges will continue to apply. Over time, these unpaid dues may accumulate and cause penalties. In rare cases, idle accounts may also be at risk of misuse. That’s why it’s always better to close accounts that you don’t need.
Once a demat account is closed, it cannot be reopened. If you need one again, you will have to apply for a new demat account with a broker or DP. The process will be similar to opening a fresh account.
This depends on your needs. If you plan to use the account in the future but want to stop transactions for a while, deactivation or freezing is a better option. But if you don’t plan on using it at all and want to save money on AMC charges, closing the demat account completely is the smarter choice.
Disclaimer: This article is for educational purposes only and should not be considered financial advice. Always conduct your research and consider consulting with a financial advisor before making any investment decisions.
