How To Transfer Shares From One Demat Account To Another Online?

Primary objective of demataccount 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 demataccount, 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 demataccount 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 demataccounts 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.

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 demataccount 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 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 DematAccounts:

Nowadays everything is digitalized, hence share transfer to other demataccounts 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.

Things to Keep in Mind While Transferring Shares from One Demat to Another:

So it is very clear that transfer of shares from one account to another is not as complicated as you think. For any transfer of shares you need to follow some basic rules and regulations. Apart from this there are several other points that should be remain at the back of your mind-

• Before you start the share transfer procedure from one demat to another demat account, read all the instructions, rules, regulations and charges carefully so that you can understand the entire procedure and carry out the same without facing any trouble.
• Choose the right broker to transfer the demat account from your existing broker. Compare the benefits of a demat account with a new broker and other additional features you will enjoy.
• Get the information on charges, duties and taxes you have to pay while transferring your shares from your existing demat account from any other demat account.
• If you want to close the existing demat account after the share transfer, then this process is free and you have to return the unused DIS back to the broker.
• Verify each and every detail required in the document while transferring the shares from one demat account to another demat account to avoid any trouble or rejection.
• Keep the records of all the share transfer deeds, share certificates and any other related documents with previous DP ID and demat account details.
• And before moving to the new demat account ask about the annual demat charges, limits and various rules, regulations and obligations towards using the demat account with the new DP.