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Learn How To Open A Demat Account

By Author: abhijit
Total Articles: 689

Days are gone when securities were stored and handled in their paper forms like that of a share certificate. These used to run the risk of getting severely mishandled developing wears and tears and also risk was there of getting these important papers stolen. Modern day’s trend has been storing securities electronically in place of papers. This holding and exchanging of shares and securities in their electronic form is possible through an effective Demat account or also known as Dematerialized account. The idea of Demat account has been introduced in Indian Stock Markets only a few decades ago. It is still becoming acceptable and popular among the stock market investors.
Demat Account
Demat account is an account offered by banks to facilitate easy and efficient transfer and holding of shares and securities in their electronic form without the need of dealing in papers such as a security certificate. An investor open demat account while registering with an investment broker. Demat or dematerialized account number is quoted for all sorts of stock market transactions to facilitate electronic settlement of trade. Access to a demat account requires an internet password and a transaction password and then the purchase and sell of securities and shares can be initiated.
Opening Demat A/C
how to open a Demat account is the next question that is tickling one’s mind after going through what it is. A demat account can be opened with a bank or a brokerage firm or any other form of registered depository participant. No need to keep a minimum balance in order to maintain this account. One wishes to open this account is required to fill up a demat account opening form and submit this along with his or her attested photocopies of his or her detail that may include PAN cards, Driving license or voter’s id card for address proof and passport sized photos of the person involved. If there will be any opening account fee or not depends on the kind of depository participant the person has approached. Generally four kinds of charges are required to be paid which are Account opening fee, custodian fee, annual maintenance fee and transaction fee. Once all the formalities are done with and the account gets started, the account holder receives a Beneficiary Owner ID. This will facilitate along with your password free access to your account. One will also receive Delivery Instruction Slip that is similar to a conventional bank cheque.
Benefits of Demat A/C
The benefits of holding and maintaining a Demat account are many which include easy and effective transaction of shares and securities as the first and foremost point. Flexibility of parking all investments through this account is provided. It ensures direct credit of all dividends and interests in the connected bank account of the account holder of this Demat account. No chance of mismatch in signature. Reduced transaction cost. It also provides better alternative to paper possessions of shares and securities. Traders can work from anywhere and need not always visit the stock markets.

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