A demat account is a stable solution to frustrating paper work associated with buying and selling of stocks in the securities market. Open a demat account to facilitate your transactions.
Dematerialized accounts, or demat accounts, are very safe and convenient to be used by online / offline traders. In the current regulated scenario, if you intend to buy, sell or transact with stocks, you need to open a Demat account compulsorily. This account collates all your shares, mutual funds and other related investments in one place. It makes transactions easy and transparent. In a nutshell, a demat account is a kind of banking account that dematerializes shares and stocks that were once based on paper work.
Go ahead; open one today and start trading on the stock exchange right away.
How to Open a Demat Account
A simple three step process gives you access to a demat account. Here are the steps involved:
- The first step is to fill up the DRF or Demat Request Form that’s available with Depository Participants (DPs, the service providers). You need to mutilate the share certificates to be dematerialized by mentioning them beside “surrendered for dematerialization”.
- The next step would be to submit the form along with share certificates to the DP. It is the duty of the DP to forward the form and certificates to the issuer for all further processing.
- The final step is to credit your depository account with the dematerialized securities.
Documents Required to Open a Demat Account
Below is the list of documents that are essential for opening a Demat account:
- A cancelled cheque
- Identification proof
- Address proof
- PAN card which is compulsory
- One or more recent photographs, etc.
Benefits Associated with Opening a Demat Account
There are plenty of benefits that can be enjoyed on holding a Demat account. Some of these benefits have been listed for an easy overview.
- With a demat account in place, your securities can be held in a safe and convenient way in a protected scenario.
- Quick and easy transferability of securities takes place once the processing is done.
- No stamp duty is levied upon the securities during the transfer or dematerialization process; this makes the overall process all the more convenient.
- The risks related to physical certificates such as bad delivery, fraud/ fake securities, deceptions, and delays are eliminated with the use of a Demat account.
- The paper work involved in the selling, buying and other stock transactions gets reduced to a very large extent.
- The transaction costs are minimized considerably.
- There is no problem of trading in odd lots as even a single share can be sold on the exchange via a demat account..
- Nomination facility is available with your Demat account.
- In case of any address change, the recorded changed address with the DP will be electronically registered with the firms in which you holds your shares. This eradicates the necessity of informing each firm individually.
- Your demat account comes with the privilege of holding both equity investments as well as instruments of debt in a single account.
So, without wasting any more time, go ahead with the mandatory process of opening a Demat account and start trading your stocks securely and efficiently.
All the best!