In India, a demat account is mandatory to hold equities and other securities in digital format.
It secures your holding from forgery, theft, and damage, which is common with physical certificates. You will need a broker registered with depository participants to open this account.
But have you ever considered what happens if you are dissatisfied with your current broker and want to switch to a new one? Is there a way around it?
The answer is ‘yes.’ You can move your current shares to a new demat account. Let’s discuss how to transfer shares online from one broker to another in this article.
How to Transfer a Demat Account from One Broker to Another Online?
Transferring shares from one broker to another is a process that involves several steps to ensure a smooth transition.
Before we proceed one thing recently changed into a process you are now required to ‘Add Beneficiary’ before initiating any share transfers. Click here for more details.
Here is a guide to help you through the process:
Step 1: Open a New Demat Account
Choose a reliable broker like Dhan and complete their online application form. You will need to provide basic details and upload KYC documents for verification.
Before you have an active account, you might also need to undergo a video verification.
Step 2: Prepare for Transfer
If both brokers have registration under the same depository (CDSL or NSDL), you can transfer shares online via the respective depository’s platform, like CDSL’s Easiest platform.
If the brokers are registered under different depositories, you must fill out a Debit Instruction Slip (DIS) and present it to your current broker to initiate the transfer.
Step 3: Initiate the Transfer
For the same depository transfers, log in to the depository’s online system and enter the details of the shares you wish to transfer.
However, the transfer will be processed for different depositories after submitting the DIS, which may take up to two days.
Step 4: Verify the Transfer
Once the transfer is initiated, monitor both your old and new accounts to ensure the shares have been transferred correctly. If not, report it immediately at the grievance portal.
Step 5: Close Your Old Account
After the transfer, withdraw any remaining cash from your trading account and submit a closure form signed by all account holders. Closing the old account generally takes about a week.
Step 6: Review Charges and Services
Before finalizing the transfer, understand the brokerage plans and other charges levied by your new broker to avoid any surprises.
Remember, when transferring shares, the ownership remains with you, so there are no tax implications.
A Demat Account from One Broker Transferer to Another Offline
When talking about the online process, let’s also discuss the offline method as well.
- Step 1: Request a DIS from your current broker. This document authorizes the transfer of shares.
- Step 2: Fill out the DIS with details such as the ISIN (International Securities Identification Number), quantity of shares, and the recipient’s Demat account details. You will also need a client ID. It is a 16-digit BO ID or Beneficiary Owner ID assigned to an investor.
- Step 3: Hand over the completed DIS to your current broker, ensuring you keep a copy for your records.
- Step 4: Your broker will verify the details on the DIS for accuracy.
- Step 5: Your broker will forward the DIS to the depository—either NSDL or CDSL, depending on where your shares are held.
- Step 5: The depository will process the request and initiate the transfer of shares to the target Demat account.
- Step 6: Once the transfer is complete, both the transferring and receiving brokers will confirm the transaction.
Ensure all pending dues are cleared with your current broker before initiating the transfer.
If the share transfer debit confirmation SMS is received by 4 PM the shares will reflect on the T+1 working day in your Dhan account, and if the SMS is received after 4 PM shares will reflect on the T+2 working day.
A nominal fee charged by Dhan is ₹ 12.50 / instruction / ISIN + GST. It may be different with every broker.
Conclusion
When transferring shares, it is crucial to follow all steps correctly to avoid any issues with your investments.
Always keep records of your transactions and correspondence with both brokers during this process. If you encounter any difficulties, don’t hesitate to contact customer support for assistance.
