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Difference Between Demat And A Regular Bank Account
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If you want to trade in shares, you have to open an online trading account, and then have an online demat account. Many banks now three-in-one accounts that can be used for financial transactions as well as buying and selling shares online. The process of demat account opening has been made much simpler and you can open ademat account online.
So what then is a demat account? It is more or less the same as a bank account, except that instead of money, it keeps track of your shares. Demat account opening, as we said earlier, is become a simple process and has done away with the need to handle reams of physical documents. An online demat account also enables you to keep track of your investments at the click of a mouse. You don’t have to hunt through several documents to find out which shares you own, how many, and their present value. All these appear on the screen whenever you click on the demat option in your online bank account.
A demat account keeps records of your shares in dematerialized form. The bank is basically a depositary participant (DP), which means that it manages your securities that are held in two depositories in India – the National Securities Depository Limited (NSDL) and Central Depository Services India Limited (CSDL). The process of dematerialization has brought about a sea change in the way in which shares are bought and sold, making it much more efficient. The cumbersome process of transferring securities in paper form used to be a major irritant to investors.
Another advantage of having a bank account with a demat and online trading account is that it makes buying and selling that much easier since everything is a single-window operation. You buy shares, the amount is automatically debited from your bank account, and the number of shares you have bought is credited to your demat account. It‘s that simple.
Gone are the days when banks used to offer just plain vanilla accounts. These online trading/ demat/ bank accounts have made buying and selling of shares so much easier that anyone can do it today. You can get the process started by applying to open a demat account online. But there is some amount of paperwork that has to be done. You can either visit a bank branch, or ask your bank to depute a representative to complete the formalities at home. It’s definitely worth having one.
Author Bio :
Ritish Kumar is a finance enthusiast and a keen observer of the Indian share market today. In this series of articles, he talks about investing in stock market and staying profitable. open a demat account online , online trading account
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