What is a Demat Account?
A Demat account, full name Dematerialized Account, is a type of digital account in which you can keep your shares and other financial products in electronic form. Its purpose is to eliminate the physical paper copy of shares so that investors can manage their stocks easily and securely. The Securities Exchange Board of India (SEBI) implemented it in 1996, which revolutionized the buying and selling of shares.
Advantages of Demat Account
- Safe maintenance: Shares in a Demat account are stored in electronic form, which reduces the risk of losing or stealing physical paper documents.
- Easy trading: Buying and selling shares has now become very simple due to the facility of online trading.
- Transparency: The investor gets timely information about their investment, which makes financial planning easier.
- Less paperwork: With a Demat account, the requirement for paper documents is reduced, thereby reducing the burden of paperwork.
Easy way to open a Demat account from home
The process of opening a demat account is completely digital and can be done from the comfort of your home. Here are some easy steps:
- Find a Depository Partner (DP): First, select a reliable depository partner. DP services are available with various brokers and banks.
- Fill in basic details: Visit the website of the selected DP and fill out the online form. Fill in your name, phone number, email, address, etc. details and PAN card details.
- Add bank details: Add your bank account details like account number, IFSC code, etc. This information is useful for dividends of shares and other transactions.
- Upload documents: Upload the required documents like photo, address proof, identity proof, and nominee documents.
- Verification: Record a short video of yourself reading the information for digital verification. Submit it.
- E-Sign: Digitally sign your application using the mobile number linked to Aadhaar.
- Submit the form: After filling in all the information and documents, submit the form. Your demat account will be activated soon and you will receive the account number and login credentials.
Demat Account Opening Fees
Various types of fees are charged by the broker or DP for opening a demat account. This may include account opening fees, annual maintenance fees, and charges for other services. You can reduce these charges by choosing the right broker.
Documents Required to Open a Demat Account
- PAN Card: As identity proof.
- Passport size photo: For identification.
- Aadhaar Card/ Voter ID/ Driving License: As address proof.
- Bank Passbook/ Cancelled Cheque: For bank details.
Opening a Demat account has now become very easy and you can open your account quickly by following these simple steps. This will help you enter the world of investing and meet your financial goals