Demat Account : A World Of Opportunities

By Author: Vijay K Shetty
Total Articles: 2542
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Most people are well versed with the stock market and would like to trade in the stock exchange. The most knowledgeable shareholder makes a huge sum of money by gauging the financial situation and the economic climate. However, to invest in the share market today, it is necessary for all to open a demat account. Demat account refers to dematerialized account.

Through a demat account, you can buy, sell and transact without hefty paperwork or encumbering any delays. It is thus convenient, safe and secure. For newcomers, a demat account is just like a bank account except for the fact that the money is replaced by electronic shares that you can buy, sell or transact with. This minimizes the need for keeping any physical documents as supports to your share transactions.

To open a demat account you need to approach a bank. Indian financial governing bodies NSDL and CDSL have approved a set of depository participants (DPs) where you must open your demat account. Opening a demat account gives you the electronic authority over your shares which you could transact with. However, opening a demat account is not compulsory ...
... for trading in the stock market. The Securities and Exchange Board of India (SEBI), has allowed trades of up to 500 shares to be settled in physical form, but considering the ease of use of demat accounts and the control it gives over your assets, most people prefer demat accounts.

To open a demat account, you need to pay four kind of fees to the DPs – the account opening fee, the annual maintenance fee – which is levied in advance, the custodian fee – this is charged monthly and transaction fee – that depends on the kind of transaction. At the discretion of the DP, the account opening fee may be waived off.

So open a demat account, start trading in shares and discover endless opportunities.

Vijay K Shetty,
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