Updated on July 18, 2023
A beneficiary account refers to a Demat account held by an individual, either on their own or jointly with others. It can also be established in the name of a corporate entity, a partnership firm, a society, or a trust. Functioning akin to a bank account, this type of account is primarily intended for conducting transactions involving commodity balances owned by the account holder and stored in warehouses accredited by the Exchange.
The commodity balances held within the beneficiary account are originally represented through physical warehouse receipts. These receipts serve as documentation for the existence and ownership of the commodities. However, with the advent of the beneficiary account system, the process has been digitized, enabling the account holder to conveniently manage and transact with their commodity holdings.
How to open a beneficiary account for commodity trading?
The process to open a beneficiary account for commodity trading is similar to opening any demat account. The steps for the same are given hereunder.
Choose a Depository Participant (DP) that offers commodity trading services.
Complete the account opening form with accurate information.
Submit the necessary KYC documents, such as proof of identity and address.
Provide recent passport-sized photographs and the requisite fees as per the DP’s requirements.
Review and sign the required agreements and disclosures.
Submit the completed application along with all the necessary documents to the DP.
Upon approval, receive the account details and login credentials to access your beneficiary account for commodity trading.