Key Takeaways

• You cannot edit an existing joint demat account's holder list; you must open a new account and transfer holdings.
• The new demat account holder needs to complete the required KYC, while existing holders may also need to provide the required details for the new account.
• Changing a holder in a joint demat account requires the applicable consent and transfer process, while the death of a demat account holder is handled through the applicable transmission process.
• The Demat account can be opened with a maximum of three account holders in Depository systems

How to Add or Remove a Joint Holder From Your Joint Demat Account

A new Demat account can be opened with joint holders. However, a joint holder cannot be added to an existing Demat account. In case of the death of a joint holder, the surviving holder(s) may either continue the existing account after removing the deceased holder’s name or open a new account.

This blog covers what a joint demat account is, how each demat account holder's role works, and the process to add or remove someone.

What Is a Joint Demat Account?

A joint demat account is a demat account held in the names of two or more people, typically up to three demat account holders in total. One person is the primary or first holder, and the rest are added as second and third holders. The securities are held jointly in the names of the listed demat account holders. The way the account can be operated depends on the mode of operation selected for the account.

People may open a joint demat account with a spouse, parent, sibling, or business partner for shared investments. A joint demat account can’t be simply changed by adding or removing a holder's name.. Every demat account holder listed on it has to go through a formal, depository-backed process removed only in case of the holder's demise.

Why You Can't Simply "Edit" a Joint Demat Account

Here's the part that surprises most investors: you cannot add or remove a demat account holder from an existing joint demat account through a simple modification form. Depositories (NSDL and CDSL) treat any change in holder composition as a fundamental change to the account itself.

A new joint demat account is opened with the required holder combination and the existing holdings are transferred from the old demat account to the new demat account. 

Steps to Add a Joint Holder

Open a new joint demat account. Submit a fresh application that includes the existing demat account holder(s) plus the new person.

Complete KYC for the new holder. The new demat account holder completes the required KYC majorly by PAN, Aadhaar, address proof, bank proof, and a photograph.

In-person verification (IPV). Depending on the broker's process, this happens in person or through a video-based KYC call.

Sign the account opening forms. The required demat account holders sign the fresh application and complete the applicable account-opening formalities.

Transfer existing holdings. Once the new joint demat account is active, submit a delivery instruction slip (DIS) or an online transfer request to move stocks and other securities across.

Close the old joint demat account. After the transfer is confirmed, submit a closure request so the previous account doesn't sit idle.

Steps to Remove a Joint Holder

Removing a demat account holder follows a near-identical path, in reverse.

1. Decide the new holder structure. Removing one holder from a three-person joint demat account means deciding whether it becomes a two-person account or an individual account.

2. Get consent from all parties. Every existing demat account holder, including the one being removed, gives consent as part of the applicable transfer process.

3. Open the new account. Open a fresh joint demat account (or individual account) with the remaining demat account holder(s).
4. Transfer the holdings. Move all stocks and securities from the old joint demat account to the new one via an off-market transfer.

5. Close the original account. Submit the closure form once the transfer reflects in the new account's statement.

Exception: If one of the joint holders dies, the process is handled through the applicable transmission process by providing the required documents such as the death certificate.

Documents You'll Typically Need

Documents you may need include:

• PAN card of each demat account holder
• Aadhar or any other valid address proof
• Latest bank statement or a cancelled cheque
• Passport size photos
• Account opening form signed with nomination information
• DIS or online transfer authorization for moving holdings

Keep both the original and new account statements handy until the transfer and closure are fully processed.

Common Doubts About Joint Demat Accounts

Does the sequence of holders make any difference?

Yes, the the first holder’s details are used for certain account and reporting purposes. So choose the sequence wisely.

Can I have different combinations of holders in various accounts?

Yes, you can open a demat account for yourself as well as another demat account as a joint account along with another set of family members.

Will my trading experience carry forward?

Your existing holdings can be transferred to the new joint demat account but the new account will have its own account details.

Is there any limit on the number of joint holders?

The majority of depositories restrict this to three demat account holders per account.

How mastertrust Helps With Your Joint Demat Account

Opening or restructuring a joint demat account through mastertrust is a simple  process. mastertrust's onboarding team helps every demat account holder complete KYC digitally, so you're not chasing paperwork across branches.

On charges, mastertrust keeps things simple: mastertrust provides zero account opening with the first year's demat AMC free, with an option to get lifetime free demat AMC by paying a nominal one-time fee. This applies to your joint demat account just as it does to an individual account.

You can start a new joint demat account application or check the demat account charges directly, and the support team can walk you through the account opening process for any holder combination.

Final Thoughts

Joint demat accounts provide a platform for families or partners to hold stocks in common, and modifications to the demat account will require the creation of a new demat account instead of an amendment in the existing account. 

Keeping the required documents ready can help you complete the process smoothly.

Frequently Asked Questions (FAQs)

Q1.Can I get a joint holder in my account without getting out of my existing demat account?

No. In order to add a joint holder, depositories need a joint demat account for the new combination.

Q2. Who has to sign for a holder to be removed from a joint demat account? 

The required demat account holders, including the one being removed, generally provide consent and signatures.

Q3. What happens to my old joint demat account after the holders change? 

Once holdings transfer to the new account, the old joint demat account is closed through a formal closure request.

Q4. Is there any fee for transferring stocks among accounts?

 Off-market transfers may involve applicable charges depending on the depository participant and type of transfer. Check the current charges before initiating the transfer.

Q5. Is there any difference in the taxation of joint demat accounts compared to that of an individual demat account? 

Tax treatment of securities held in a joint demat account can depend on the actual ownership and source of funds. The first holder's details may be used for certain reporting purposes, but tax treatment should be checked based on the specific circumstances.