One Year Without Trading Can Turn Your Demat Account Dormant
Mumbai, 11th April 2025: Demat accounts are essential for anyone looking to trade or invest in the stock market. Without a Demat account, you won’t be able to buy or sell shares on major stock indices like the BSE Sensex and NSE Nifty. It serves as a digital storage space for your securities, making trading safe, quick, and paperless. Opening a Demat account is now easier than ever, thanks to a wide range of online brokerage apps. Platforms like Zerodha and Groww have gained significant popularity among investors due to their user-friendly features and low fees. In addition to these, many other brokerage apps are available, offering various tools and benefits to suit different investment styles.
Sometimes, we don’t use our Demat account for a long time due to personal reasons. There is no buying or selling of shares, and we start to wonder if the account has been closed. As per the rules of SEBI (Securities and Exchange Board of India), if there is no trading in any segment like shares, mutual funds, ETFs, or currency for 12 months, the Demat account can become inactive or dormant. This means some features may be blocked, but the account is not permanently closed. You can reactivate it by following a few simple steps. Let’s understand this rule better with a few examples.
As per SEBI rules, if there is no trading activity in any segment (equity, mutual funds, ETFs, currency, etc.) for 12 consecutive months, a Demat account may be marked inactive. Here are a few examples to understand how this rule applies in real situations:
1. Case 1: Ravi’s Inactive Account
Ravi opened his Demat account on 1st January 2024. However, he did not make any trades or start an SIP during the entire year. As a result, if no activity is recorded, his Demat account can become inactive on 1st January 2025.
2. Case 2: Meena’s Occasional Trading
Meena opened her account on 2nd February 2024. She made two purchases, one on 1st May 2024 and another on 5th August 2024. If she doesn’t make any more transactions after August 2024, her account may be considered inactive from 5th August 2025.
3. Case 3: Karan’s Mutual Fund Investments
Karan prefers to stay away from the ups and downs of the stock market. He invests mostly in debt and hybrid mutual funds. Even though he avoids stocks, his Demat account remains active because he is still trading in mutual fund segments.
In simple words, any kind of trading should be done within 12 months to keep the Demat account active.
