How Can I Transfer Shares from One Demat Account to Another?

If you are holding shares in a demat account and want to move them to another one, either due to switching brokers or consolidating accounts, the process is simple and straightforward. In this guide, we will walk you through the steps, explain the required documents, and highlight some key points to keep in mind during the transfer. So, how can you transfer shares from one demat account to another? Let us break it down.

What is a Demat Account?

Before we get into the transfer process, let us quickly go over what a demat account is. A demat (short for “dematerialized”) account holds your shares and securities in an electronic format. It eliminates the need for physical share certificates, making it easier to manage your portfolio and trade in the stock market.

Why Would You Transfer Shares from One Demat Account to Another?

There are a few reasons why someone might want to transfer shares between demat accounts:

Switching brokers: If you are dissatisfied with your current broker or want to explore better services, transferring shares to a new broker’s demat account is a common solution.
Consolidation: You may have multiple demat accounts and prefer to merge them into one for easier management.
Joint account transfers: You might want to transfer shares from an individual account to a joint demat account or vice versa.

Now that we know why you might need to transfer shares, let us get into the how.

How Can I Transfer Shares from One Demat Account to Another?

You can transfer shares in two primary ways: off-market transfer or closure-cum-transfer. Both methods are easy to use but have slightly different processes.

Off-Market Transfer

An off-market transfer is when you transfer shares between two demat accounts that may or may not be with the same depository or broker. Here is how it works:

Step 1. Fill out the Delivery Instruction Slip (DIS)

When you opened your demat account, you received a booklet of DIS slips from your broker. To initiate a share transfer, you will need to fill out one of these slips.

Provide details like the ISIN (International Securities Identification Number) of the shares, the quantity to be transferred, and the receiving demat account details.
Ensure accuracy while filling the slip to avoid any issues.

Step 2: Submit the DIS slip to your current broker

After filling in the DIS slip, submit it to your existing broker (where the shares are currently held). They will process the transfer.

Step 3: Wait for confirmation

Once the transfer request is processed, the shares will move from one demat account to the other. This can take up to 3-5 business days, depending on the brokers involved.

Closure-Cum-Transfer

This method is often used when you want to close your existing demat account and transfer all the shares to a new account. It is usually done when switching brokers entirely. Here is how you can do it:

Step 1: Contact your existing broker

Reach out to your current broker and inform them about your intention to close the demat account. They will provide you with a form called the “Account Closure Form.”

Step 2: Fill out the closure-cum-transfer form

In the form, you will need to provide the details of the new demat account to which your shares will be transferred. Attach any necessary documents as requested.

Step 3: Submit the form and wait for the transfer

Once you submit the form, the broker will process the closure and transfer all the shares to your new demat account. Like the off-market transfer, this can also take 3-5 business days.

What Documents Are Needed for A Share Transfer?

In most cases, the process requires only a few basic documents:

DIS slip (for off-market transfers): As mentioned, this is the main document needed for an off-market transfer.
Closure form (for closure-cum-transfer): This is necessary if you are closing your demat account and moving all the shares.
PAN card and ID proof: Some brokers might ask for identity verification during the process, though this is not always required.

Are There Any Charges for Transferring Shares Between Demat Accounts?

Yes, brokers usually charge a small fee for share transfers. The charges may vary depending on the broker and the number of shares being transferred. Typically, the fee is a percentage of the value of the shares or a flat rate per ISIN.

Can You Transfer Shares Online?

Yes, many brokers offer online transfer services. If both your demat accounts are with the same broker or if your broker provides an online trading platform like Findoc, you can initiate the transfer online without needing to fill out physical forms.

For example, If you are with NSDL, you can use the SPEED-e facility to transfer shares electronically.

For CDSL users, the Easiest platform allows you to transfer shares online.

These platforms require you to register and get approval, but once set up, they simplify the transfer process.

Can I Transfer Shares from My Demat Account to Someone Else’s Demat Account?

Yes, you can transfer shares to another person’s demat account, such as a family member, through the off-market transfer method. In such cases, you need to provide the recipient’s demat account details in the DIS slip. However, if it involves transferring shares to a third party, be aware of any tax implications or legal requirements that might apply.

How Long Does the Transfer Process Take?

The share transfer process typically takes 3-5 business days. If there are any discrepancies in the DIS slip or issues with your broker, it could take longer, so ensure all details are correctly filled out.