Moving shares between Demat accounts is generally required by investors in case of the need to consolidate holdings, migration to new brokerages, or rearranging their portfolios. The transfer order will be systematic and guided by depositories so that there will be assurance of safety. Knowing how transfer procedures work can help you to manage investments without any hindrance in your share market.
Understanding the structure of a Demat account
Demat account comprises securities like shares, bonds, mutual funds, and ETFs in electronic form. It is basically maintained by two depositories in India – NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).
Each account is linked to a Depository Participant (DP), which may either be a broker or a financial institution. Shares are transferred from one DP to another, either between two DPs within the same depository or across different depositories, where the depository itself may be different.
Reasons for transferring Shares
There are varied reasons why persons transfer their shares:
- To consolidate various accounts into one
- Changing brokerages or service providers.
- Gift or share transfer to family subs.
- Movement of shares after an inactive Demat Account is closed.
Whatever the reason, the transfer process tends to remain simple when done very systematically.
Types of Share Transfers
Demat accounts allow you to transfer shares into different other demat accounts in two ways:
- Intra-Depository Transfer
It is called transfer between the two demat accounts under the same depository; that is, whether NSDL or CDSL. The transfer is quite simple and rapid since both accounts are in the same system.
- Inter-Depository Transfer
If one account is under NSDL while the other is under CDSL, however, this becomes inter-depository transfer and it takes a bit longer since it has to pass through both depositories.
Transfer Modes: Offline and Online
You can transfer shares either offline by using a Delivery Instruction Slip (DIS) or online through the portals of depositories.
1.Offline Transfer (With DIS)
- Collect DIS from the old broker: Collect a Delivery Instruction Slip booklet from your existing DP.
- Fill in transfer details: Fill in the details, appoint the ISIN (International Securities Identification Number) for each share, enter the quantity, and write out the Demat account number of the recipient.
- Determine what type of transfer: Intra is selected for transfers within the same depository, while Inter applies to cross-depository transfers.
- Submit the slip: Hand the filled DIS to your current broker or DP for processing. After finalization, the shares will transfer to the new account within a couple of business days.
2.Online Transfer
Both NSDL and CDSL have electronic facilities that make such transfers accessible. Investors registered on any of these platforms can thus digitally initiate a share transfer without paper.
For NSDL, the facility is called SPEED-e. For CDSL, however, it is called EASIEST.
Logging into the system, authentication by OTP, and completing the transfer through new Demat account details are thus used. This is the best method for active traders in the share market who manage multiple portfolios at a time.
Precaution Before Transfer
Before any initiation of process, do these verifications:
The receiver Demat account should be running and approved.
Cross-verify ISINs and account numbers to escape rejection.
Holdings must be free from any lien or pledge.
Keep the transaction receipts and acknowledgement slips.
Overlooking or wrong details may result in a delay or even cancel the transaction; thus, appropriately checking is critical.
Charges and Processing Time
The transfer charges depend on both your broker and whether it is intra- or inter-depository; Some brokers also waive transfer costs if you close your account and subsequently transfer your holdings to another Demat account within the same service provider.
Usually, the processing takes 2 to 5 working business days after verification of all particulars.
Tracking and Confirmation
The way forward here is to maintain easy access to databases, be it through the exchange interface, market intermediaries or beneficiary accounts itself. It is easy to see at a glance the transferred shares reflecting in the respective Denominated Account.
Regular monitoring helps ensure that your holdings are away from the loop and monitored under your investment records.
Closing Discussion
In most cases, a share transfer from one Demat Account to another can be done with utmost ease once an individual knows the structure and the requirements. Whether the process is done online or otherwise, smooth transfer only follows if proper and valid information along with the necessary authorization are provided.
For the investors in the stock markets who manage their portfolios, having everything dematerialized into a single Demat Account simplifies the tracking of your portfolio, decreases paperwork, and further improves control over your investments. By following the right procedure and using digitized tools, you can make the transition seamless and efficient.