Investments Done Easy: Demat Account

By Author: Shilpika Ponnappa
Total Articles: 428
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For a regular person, a dematerialized account might seem like a foreign thing. However, this is a very useful account that you should get if you wish to make an online purchase of various securities like gold eltfs, bonds, stocks and mutual funds. Individuals can either choose to receive these forms of securities in either physical form or dematerialized form. For many experts, the latter option is much better.

How the account functions
A demat account functions very much like a standard savings account. However, instead of saving just money, this account is used to save and hold a person's stocks, bonds and other securities that one might have. The simplest way to describe this account is that it is held electronically. Possessing physical securities can be a lot of work since you have to store them and there is a greater risk at the end of the day on the part of the owner. Another great advantage of this account is that you can easily get records and data of your securities by receiving periodic statements.

Advantage for online trading
With online trading, the individual can choose when to do his ...
... or her trading without being bound by time constraints. This is the method of today and it has numerous advantages. One of these advantages is the ease and convenience in banking. A dematerialized account is a great complement to any online trading venture. It is also easier to manage and it makes online trading more secure especially for keeping securities.

Getting an account
It is crucial that you go to a DP or a Depositary Participant which is registered with a regulator for the Indian Stock Market. SEBI is the most popular regulator in India. All stock broking establishments offer this kind of account. There are also some banking and financial institutions offering the account.

Understanding a DP
The depositary participant, like what most stock broking companies are, is those intermediaries between a depository and the investor. An account has to be opened when applying with a sub broker or a share broker.

Some tips
It is advised by experts that when applying for a demat account, a trading account should also be set up by the individual.

It is crucial to get this kind of account (demat) since even if physical share are still available, nobody who does modern trading exercises find the advantage of getting physical securities. To trade and invest in the smoothest and most advantageous way possible, it is critical to get this account before participating in the growing Indian trading and investment industry.

Shilpika Ponnappa,
Get more information on Demat Account, Fixed Deposit Rates in India