Get to Know How to Open a Demat Account
Days are gone when securities were stored and handled in their paper forms like that of a share certificate. These used to run the risk of getting severely mishandled developing wears and tears and also risk was there of getting these important papers stolen. In these modern days the trend has been storing securities electronically instead of papers. This holding and exchanging of shares and securities in their electronic form is possible through an effective Demat account or also known as Dematerialized account. The idea of Demat account has been introduced in Indian Stock Markets only a few decades ago. Online demat account opening is still becoming acceptable and popular among the stock market investors and more awareness needs to be spread of the positive sides of having this type of account to facilitate easy transaction. What is a Demat Account? Demat account is an account offered by banks to ensure easy and smart transfer and holding of shares and securities in their electronic form without the need of dealing in papers such as a security certificate. An investor open demat account at the time of registering with an investment broker. The dematerialized account number is quoted for all sorts of stock market transactions to facilitate electronic settlement of trade efficiently without any kind of troubles associated. Access to a demat account requires an internet password and a transaction password and then the purchase and sell of securities and shares can be conveniently initiated. Opening: How to open a Demat account is the next question that is tickling one’s mind after going through what it is. A demat account can be opened with a bank or a brokerage firm or any other form of registered depository participant. No need to keep a minimum balance in order to maintain this account. One wishes to open this account is required to fill up a demat account opening form and submit this along with his or her attested photocopies of his or her detail that may include PAN cards, Driving license or voter’s id card for address proof and passport sized photos of the person involved. If there will be any opening account fee or not depends on the kind of depository participant the person has approached. Generally four kinds of charges are required to be paid which are Account opening fee, custodian fee, annual maintenance fee and transaction fee. Once all the formalities are done with and the account gets started, the account holder receives a Beneficiary Owner ID. This will facilitate along with your password free access to your account. One will also receive Delivery Instruction Slip that is similar to a conventional bank cheque. Advantages: Easy and effective transaction of shares and securities without any kind of hassles is the first and foremost advantage of opening Demat a/c. Flexibility of parking all investments through this account is provided. It ensures direct credit of all dividends and interests in the connected bank account of the account holder of this demat account. No chance of mismatch in signature coupled with less transaction cost is also a positive side to it. It also provides better alternative to paper possessions of shares and securities. Traders can work from anywhere and need not always visit the stock markets.