How To Open Demat Account?

Before understanding the simple procedure for demat account opening, understand what you mean by “Demat.”

Understanding the meaning of Demat:

If you are thinking about how to invest in the stock market, the first thing you should have is a demat account. Dematerialization account is an account to buy and sell shares. The shares bought and sold are in electronic form. According to SEBI (Securities & Exchange Commission) regulator of the stock market, it is mandatory for all listed shares to be settled in demat mode.

Similar to bank account opening:

You use savings account to deposit as well as withdraw money. Likewise, demat account favors withdrawal and deposition of stocks, bonds, NSCs and debentures.

Online trading is a process of selling and buying of the shares online. After demat account opening, the process to sell and buy shares online and the following transaction is automatically adjusted in the demat account.

How to open demat account? | Understanding the process of demat account opening

A demat account can be opened in banks, brokerage firms and financial institutions. Basically a dematerialization account can be opened with any registered depository participant (DP). In order to open a dematerialization account, one has to follow these steps -

  • An account opening application form should be filled
  • Signing an agreement with the depository participant
  • Provide all the necessary documents like identity proof, address proof, pan card copy, a cheque. SEBI has made the submission of pan card mandatory.
  • The DP will allocate a Beneficial Ownership identification to quote while making transactions. The charges of opening a dematerialization account and maintaining it varies from DP to DP.

    Once your DP account is activated, you have to open a trading account with any of the brokerage firms. There are many brokerage firms with whom you can open a demat account like ICICI, India bulls, HDFC Securities, Aditya Birla Money, Kotak Securities, Motilal Oswal Securities, LKP Securities etc. You can also open demat account with banks like ICICI Bank, HDFC bank. Most of the banks provide demat account opening service.

    Benefits of Demat Account

    • Demat account enables easy share trading online which is fast and convenient. You can sell or buy and redeem your debentures within few minutes. Hence, you’re freed from cumbersome paper work.
    • A person experiences diversity which means one can easily trade across several investments types like shares and bonds as well as debentures followed by futures and options trading.
    • You get computerized record of all transactions
    • One receives direct credit details of all his dividends and interests which are transferred to his associated bank account
    • Get computerized update on events like bonus and other benefits
    • Experience the ease of online trading which enhances overall trading experience.

    Now you see how easy it is to open a demat account? The world has become advanced. So why not use the opportunity and utilize demat account for smooth trading online and make some money!

    Tags : demat account, demat account opening, open demat account, demat and trading account