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Mobile applications are used by many people to access their Demat accounts, view shareholding details, and monitor their investments. But there can be cases where people may shift from one platform to another, stop investing or leave the application idle for a long time. In such cases, the main question that comes into mind is, what will happen to the shares kept in their account if they have stopped using the application? They remain in the Demat account maintained with a depository participant (DP), even if the investor stops using the app.
Does Stopping the Use of a Demat App Affect Your Shares?
No. Discontinuing the use of the demat app does not lead to the loss or transfer of the shares from the account automatically.
Demat accounts hold the securities electronically at India’s two depositories – the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL). The depository participant functions as an intermediary between the investor and the depository.
The application primarily serves as a medium through which investors can access their account and investment services. Even if the investor stops using the application or stops accessing the account, the securities will continue to stay in the Demat account.
What Happens When You Stop Using Your Demat Account?
There are a few important things investors should understand when they stop using their accounts.
1. Your Shares Remain in Your Account
Shares purchased and credited to a Demat account continue to remain there even if the investor stops using the associated application. Ownership does not depend on how frequently the investor logs in.
2. The Account May Become Inactive
If there are no transactions for a prolonged period, the Demat account may be classified as dormant or inactive, depending on the depository participant’s policy and applicable regulatory requirements.
This does not mean that the shares are automatically removed. However, additional verification may be required before certain transactions or account operations can be completed.
3. Corporate Benefits May Still Be Credited
Investors holding eligible shares on the relevant record date may continue to receive corporate benefits such as dividends, bonus shares, and stock splits. These benefits are generally processed through the depository system and credited to the linked account, subject to applicable conditions.
4. Account Maintenance Charges May Continue
There may be AMC on some Demat accounts. The AMC can be levied regardless of whether the account is in active use by the investor.
It will depend on who the service provider is, the type of account, and the cost structure.
5. You May Need to Complete Additional Verification
If an account is dormant, the investor might have to fulfil some more formalities before executing a few transactions. This can include identity verification and KYC verification.
What Is the Difference Between an Inactive and a Closed Demat Account?
An inactive account and a closed account are not the same. Understanding the difference helps investors avoid confusion.
| Parameter | Inactive Demat Account | Closed Demat Account |
| Account status | Temporarily inactive | Permanently discontinued |
| Shareholding | Shares generally remain in the account | Holdings must be transferred or otherwise settled before closure |
| Trading activity | May require reactivation | Cannot be used after closure |
| Access | May require additional verification | Account access is discontinued |
| Charges | May continue as per applicable terms | Charges depend on the closure process and outstanding dues |
An investor should not assume that uninstalling an application closes the underlying Demat account. Account closure requires a separate request through the DP.
How Can You Access Your Shares If You Stop Using Your Demat App?
In the case of an investor wishing to access their securities holdings post exiting the application, the following procedure needs to be followed:
- Contacting Depository Participant: Identify the participant who holds the Demat account and contact their customer service team.
- Details of Account: Make sure that the Demat account number and other details are ready.
- Accessing the Demat Account: Contact the DP and ask about accessing the account on their website or Demat account app.
- Verification of Account: If the account is inactive, then verify the account according to KYC norms.
- Review of Securities Holding: Once the access has been gained, review the securities holding.
Investors may even access the information from the services provided by the depository.
Conclusion
The discontinuation of usage of a mobile app does not imply that there will be an end to the ownership of the shares in the Demat account. They continue to be stored in the depository system, but the procedures for accessing the account, account fees, and activation criteria may differ. One must keep track of the same even when not trading actively. InCred Money is another platform that one can consider while searching for an investment-related service.