scorecardresearchLooking to switch online brokerage accounts - Here’s how to transfer your invest

Looking to switch online brokerage accounts - Here’s how to transfer your invest

Updated: 17 Mar 2022, 10:47 PM IST
TL;DR.

Investors frequently transfer shares from one broker to another because they feel the services offered or the fees imposed by another broker are superior. However, the procedure is not straightforward. Let's take a closer look at how this process is carried out.

A brokerage account helps you buy and sell shares in real time.

A brokerage account helps you buy and sell shares in real time.

Demat accounts make trading in the stock market more convenient. You may purchase and sell shares, as well as invest in other financial products, with the press of a mouse. Stockbrokers who operate as middlemen between the stock exchanges – the NSE and the BSE – facilitate trading with demat accounts.

Distinct brokers provide different online trading platforms with their own unique interfaces filled with features and tools that allow traders to research and analyse the markets before establishing trading positions in the modern era of online trading.

Because brokers offer a service, they charge a brokerage fee, which varies from one broker to the next. As a result, it is usual for customers to transfer shares from one broker to another because they believe the services provided by another broker are better or the fees charged are lower. However the process is not very simple. Let us try to understand how this procedure is carried out.

How to transfer a brokerage account?

  • Make sure the new broker you want to switch to is providing you a fair deal before starting the process of transferring shares from one broker to another. You could search for inexpensive brokerage costs, sophisticated trading platforms, or free lifetime demat AMC.
  • The depository with which the brokerage is registered is an essential consideration. The National Securities Depository (NSDL) and the Central Depository Services (CDS) are India's two central depositories (CDSL). It is quite simple to transfer your shares if the new brokerage firm and the old one are both members of the same depository. You may accomplish it on your own by going online.If your firms' depositories are different, you must first fill out delivery instruction slips (DIS) and send them to your current broker.
  • It is important to remember that you may not just move your demat account from one broker to another. You will need to establish a new account with the new company. Although it is legal to maintain several demat accounts, it is recommended that you close old ones if they are no longer needed. You can avoid paying AMC and other recurring costs by doing so.
  • If the old and new brokerages are both registered with the same depository, the account closure request form may be downloaded on their website. If each brokerage house's depositories are different, you will have to submit the DIS to the existing business to begin the transfer of your shares. This transfer might take up to two days, after which you will be able to apply to terminate your account. If you want to shut your trading account after you close your demat account, remember to do so as well.
  • You must terminate your old demat account before opening a new one with a new broker. Before you may terminate your account, however, you must complete a checklist. Make sure to cancel all futures and options contracts, sell or transfer securities from your current demat account to the new one, and pay off any outstanding debts.
  • When investors want to move brokerages, pending credits to their trading accounts is a common concern. It is possible that shares purchased have not been credited to your demat account, that you have not been paid for those sold, or that your trading gains have not yet been reflected in your account. In this case, you must examine your ledger for any debits and ask the broker to adjust them against your credits. Then, tell your broker to transfer any pending stocks to your demat account and the remaining funds to your bank account.

By completing the proper procedures and obtaining the necessary approvals, you can transfer shares from one broker to another. When there are no credits owed to the broker, the transfer is straightforward. The brokerage account transfer process might become a bit complicated if you owe credits to the broker, either in the form of credits to your bank account from shares you sold or in the form of equities to be credited to your demat account that you acquired. You may simply transfer shares between brokers if you follow the steps mentioned.

Article
What happens when your broker shuts down?
First Published: 10 Feb 2022, 03:16 PM IST