InvestorQ : I am going abroad to be with my son for 1 year. Should I close my demat account?
Anjana Aiyar made post

I am going abroad to be with my son for 1 year. Should I close my demat account?

Answer
user profile image
Riya Dwivedi answered.
2 years ago


You don’t need to close your demat account at all. You can close your account only if there are no shares in the demat account. In case, there are shares in your account, there are 2 things to remember. Firstly, if you don’t transact for a couple of years, your DP will automatically freeze your account as a safety measure. Even SEBI regulations stipulate that. Secondly, there is also the possibility that frauds may be committed in your absence and you will have a very difficult time proving it once you come back from your foreign trip. The best way for you will be to give a freeze request. There is an important precaution when your demat account is likely to be idle because you are likely to go abroad for a few months. You can also keep your demat account in safe custody so that nobody can undertake any unauthorized transactions in the same. When you give a Freeze request, your account cannot authorize any transaction till you come back and unfreeze the account with your authorized signature. That means there is no scope for any fraud or any unauthorized transaction in your demat account in your absence. Find below the form required for you to freeze or unfreeze the account. You can use the same form for both.
You can use the above form to either freeze or unfreeze your demat account. You can just tick the right column in the form above. Remember to mention the execution date precisely as the freeze / unfreeze will be effective from that date only. Also you can either choose to freeze your entire DP account or just selected ISINs can be frozen. The choice is yours.
Lastly, if you find any movement in your demat account that is not authorized immediately use the option of freezing your account. Once that is done, you can always opt to escalate the issue with the exchanges and the regulator and then choose to unfreeze the account. Remember, your shares in the demat account are absolutely safe. A little bit of effort from your side, can go a long way in making your journey in the markets safer! Use the freeze whenever you want to play it safe.