If you have a Demat account that you opened years ago and haven’t used in a while, you’re not alone. Many people in India open Demat accounts during market hype – maybe during IPO seasons, or when their friend told them to invest – and then forget all about it.
But here’s the thing: even if you don’t use a Demat account, it can still charge you Annual Maintenance Charges (AMC). So keeping an unused Demat account open could silently eat your money.
Why You Should Close Unused Demat Accounts
First, if your account is inactive, you’re still at risk of:
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AMC charges every year (₹250–₹500+ depending on broker)
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KYC non-compliance issues
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Freezing of account by depositories (CDSL/NSDL)
Also, if your mobile number or bank changes, you might miss critical alerts related to shares or dividends.
So it's better to close it properly instead of ignoring it.
How to Close a Demat Account – Step-by-Step Process
Here’s how you can close your Demat account (for most brokers like Zerodha, Angel One, Upstox, Groww, etc.):
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Download the Account Closure Form from your broker’s website.
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Fill it manually – include your client ID, DP ID, and sign it.
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Attach a self-attested copy of your PAN and Aadhaar.
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Clear any holdings – sell your stocks or transfer them to another Demat account.
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Submit the form to the broker – either physically or by courier.
Some brokers allow partial online closure (like closing trading account online, but Demat still needs physical form).
Do You Get Confirmation from CDSL or NSDL After Closure?
Yes, once your account is fully closed, you usually receive an SMS or email from CDSL or NSDL, depending on where your account was held. But this may take up to 7–15 working days, and many users report that they only get confirmation from the broker — not from the depository directly.
So don’t panic if you don’t get a CDSL/NSDL message instantly. Instead, check after a week and confirm with your broker’s customer care.
What If You Close Your Bank Account But Not Your Demat Account?
This is one of the most ignored problems.
If you close the bank account linked to your Demat account, your Demat might not work properly. You won’t be able to:
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Receive IPO refunds
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Get dividend credits
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Pay for new share purchases
Also, any ECS setup for AMC will fail, which may lead to penalty or account being frozen.
So, always either update the bank account before closing the old one or close the Demat account completely.
What If You Have Delisted Shares and Can’t Sell Them?
Now this is a real headache.
Many users try to close their Demat account and get this reply:
“You cannot close the account unless you transfer or sell all your holdings.”
But what if you’re holding delisted shares (which are not traded anymore)? In that case, you can’t sell them, and transferring is useless because other brokers won’t accept them either.
Here’s what you can do:
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Request your broker to transfer them to a remat (physical form) and then close the account.
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Or, submit a closure-cum-transfer request, marking delisted shares as non-transferable.
Some brokers still reject the closure, unfortunately. In such cases, you may have to write a declaration and follow up manually. That’s the real ground-level struggle people are facing.
Can You Close a Demat Account by Post or Courier?
Yes, most brokers accept Demat closure forms by post. But here’s the twist — many users report that:
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Their forms get delayed
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Signature mismatch causes rejection
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No one responds unless you follow up via email or call
So, if you are posting the form:
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Always use Speed Post or courier with tracking
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Attach ID proof (Aadhaar, PAN)
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Take a photo of the form before sending
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Follow up with customer care after 5 days
Can Your Employer Trace an Undisclosed Demat Account?
This may sound scary, but no — your employer cannot directly trace your Demat account unless:
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You declare it yourself
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Or you're under an audit (like in PSU or compliance-heavy jobs)
However, if you're working in a regulated industry (like banking, government, or defense), hiding financial assets may be a compliance issue. So if you’re required to disclose all your assets, better be honest.
For others — no, your broker won’t share your Demat data with your employer.
What Happens to Your Stocks If You Close the Account?
Before closure, you must either:
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Sell the shares, or
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Transfer them to another Demat account
If you forget to do this, your closure request will be rejected. Brokers do not close accounts with holdings (even ₹1 value).
So always check your holdings and dematerialized shares before applying for closure.
How Long Does It Take to Close a Demat Account?
Normally:
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7 to 15 working days if you send form and documents correctly
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Up to 30 days if there are issues like:
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Signature mismatch
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Holdings still present
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Form lost in courier
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Tip: Follow up regularly. Some users had to send multiple emails to get closure confirmation.
What Happens to Money in the Trading Account?
If you have balance in your trading account (not Demat), withdraw it before you apply for closure.
After account closure:
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Your funds are not accessible
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Getting them back requires manual emails and escalation
So always:
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Sell or transfer holdings
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Withdraw funds
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Then request for closure
Does Closing a Demat Account Affect Your Credit Score?
Not at all.
Demat and trading accounts have no link with CIBIL or credit scores. Closing them won’t hurt your score in any way.
But make sure you don’t have dues pending (like negative balance, unpaid AMC). That could lead to legal issues, not credit score drop.
If You Delete Broker App (like Upstox), Is Account Closed?
No!
Uninstalling or deleting the app does NOT mean your Demat account is closed.
It’s like deleting your bank app — your bank account is still active.
So if you deleted Groww, Upstox, or any other broker app and assumed your Demat is closed — please double-check. You may still be getting charged AMC silently.
If You Close Demat Account, Will Aadhaar or PAN Be Deleted?
No. Your Aadhaar and PAN are linked for KYC purposes.
Closing a Demat account won’t affect your:
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PAN
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Aadhaar
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eSign setup
Those stay active and usable for other brokers, banks, or government services.
Same goes for your mobile number and email ID — they’ll remain usable.
Will Primary Bank Account Be Deleted After Demat Closure?
No. Your bank account stays active. Demat and bank accounts are linked, but not dependent.
Only thing is:
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You won’t receive dividends
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You won’t auto-debit AMC
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Your bank won’t be used for IPO or stock settlement
But your bank account itself will stay safe and active.
Final Words – Don’t Just Ignore That Old Demat Account
If you’ve read this far, you already know more than 90% of people who opened a Demat account and forgot about it.
Don’t wait for AMC to pile up or for your account to get frozen. Close your unused account today — but do it properly.
And if you’re facing any of the problems mentioned above — you’re not alone. Many people are struggling with the same issues. Just follow up, send documents properly, and make sure your broker doesn’t ignore your request.
Sources
NSDL Official Site – https://nsdl.co.in
CDSL Official Site – https://cdslindia.com
Zerodha Support – https://support.zerodha.com
Groww Help Center – https://groww.in/help
Angel One Help – https://www.angelone.in
Disclaimer:
This article is intended for educational and informational purposes only. While every effort has been made to ensure accuracy, rules, charges, and procedures may vary depending on the broker, depository (CDSL/NSDL), and government regulations. Readers are advised to contact their respective brokers or consult a qualified financial advisor before making any decision related to Demat account closure.
The author and the website NiftyFifty are not responsible for any loss, delay, or issue arising from the use of information provided in this article