The very first step to start investing in the share market is to open a demat account. Many people who want to start investing in the share market are not aware of how to open a demat account. So let’s know about the Demat account and the whole process of opening it. The full name of Demat Account is Dematerialized Account.
There is a famous dialogue from the famous web series Scam 1992 that the stock market is such a deep well that it can quench the thirst of the whole country. But to extract water from this deep well of share market, the bucket which you need the most is called Demat Account.
That is, the first step to start investing in the share market is to open a D-mat account. Many people who want to start investing in the share market are not aware of how to open a demat account. So let’s know about the Demat account and the whole process of opening it.
Demat account is required for investing in the share market.
The full name of Demat Account is Dematerialized Account. It is just like a normal savings account. Just like a demat account keeps our money safe in the bank, in the same way a demat account also allows us to hold shares and securities through electronic form. Demat account stores physical shares in a dematerialized manner. The process of converting physical shares into electronic form is called dematerialization. At the time of trading, these shares are debited and credited through the demat account only.
There are four types of Demat Account
Explain that there are four types of Demat Account . While opening the demat account, investors should choose the demat account according to their profile. You can open your demat account in just a few minutes and start trading in the share market. Let us know about the different types of demat accounts.
Regular Demat Account
This demat account is for investors who only want to buy and sell shares and deposit securities. Whenever you sell shares it will be debited from your account and whenever you buy shares it will be credited to your account.
Basic Service Demat Account
This is a new type of de-mat account introduced by the market regulator SEBI. This account has been started keeping in mind the small investors.
Repatriable Demat Account
Repatriable Demat Account is for people living outside India i.e. NRI. Through this account, such people can start investing in the Indian stock market. However, to transfer funds, this account has to be linked to the NRI account.
Non-Repatriable Demat Account
This account is also for NRI. However, money cannot be transferred abroad through this account.
How can open Demat Account
You can open a D-match account through your bank or any brokerage firm. To open a Demat account, first you have to choose a Depository Participant (DP). It can be a bank or a broker. It is also very important to pay attention to the brokerage charges, annual charges and leverage while opening a demat account. Along with this, you will also have to fill and submit the KYC form to open a demat account.
Along with this, you will also have to submit PAN card, residence proof, ID proof and passport size photo. Along with this, you will also have to submit a canceled check along with the bank details. After this you will also have to sign an agreement. Currently, many banks offer the facility to open a demat account online.
What are the advantages of demat account
Demat Account provides the service of fast transfer of shares without any hassle. Investment can be done in the stock market only through Demat account and it also keeps our shares safe. One can also easily track trading activities through demat account. It can be accessed from anywhere and anytime.
