It is necessary to have a Demat Account to invest in the Share Market. Today many people buy and sell shares in the stock market to get profit. In the hope of big returns, not only domestic but foreign investors also invest in large amounts in it. So if you also want to invest in the stock market, then you must also open your Demat account. Today we are going to give you this information that How to open Demat Account.
If you are investing in the market then you must have a Demat Account. When you buy shares, the shares come in the demat account only. The way you deposit it in the bank for the safety of your money, in the same way our shares are safe in the demat account. So let us now know the details about Demat Account in detail.
What is Demat Account
In simple words, a Demat account is similar to a bank account, the only difference between the two is that money is transacted in a bank account while shares are transacted in a Demat account. Demat account is used as an account and locker where the shares bought are deposited. Demat account is used only and only after buying shares and keeping them in it.
Demat Full Form:
The Full Form of Demat is Dematerialised.
While selling shares, the shares from our demat account are credited to the buyer’s demat account. Along with shares, bonds, government securities, mutual funds can also be held under the demat account. As per SEBI (Securities And Exchange Board Of India) instructions, shares cannot be bought or sold in any form other than a demat account. Therefore, if you want to buy or sell stocks from the stock market, then it is mandatory to have a Demat account.
Documents for Demat Account
To open a Demat Account, you need several important documents such as:
- PAN card
- Passport size photo (two photos)
- Driving license
- Bank account number
- Aadhar card
- Ration card
- Electricity bill
How to Open A Demat Account
There are 2 types of process to open a demat account. Demat account can be opened in two ways:
- Online
- Offline
How To Open Demat Account Online
If you want to open your demat account online, then you can open your demat account online by visiting the website of any bank or brokers. We have listed below the names of banks which also open demat account online.
Demat Account Banks
There are many banks in India that open demat accounts. List of Banks to Open Demat Account:
- ICICI Securities Ltd.
- State Bank Of India.
- HDFC Securities Ltd.
- Axis Securities Ltd.
- Kotak Securities Ltd.
- Demat Account Charges
To open a Demat account, Demat account charges are also required to be paid, which are charged by different banks and stock brokers in different amounts, as well as after opening a Demat account, you also have to pay Demat Account Charges, Which you have to pay as a fee every year in exchange for the service of demat account. To open a demat account, you have to pay some charges, these charges are of many types.
- Annual Maintenance Fees
- Protective Duty Fees
- Transaction Fees
How to Open Offline Demat Account
Step 1: If you want to open your demat account offline, contact any Depository Participant (DP) who is a broker or sub-broker of NSDL (The National Securities Depository Limited) or CDSL (Central Depository Services (India) Limited).
Step 2: Along with the account opening form, you need to attach photocopies of certain documents for proof of identity and proof of address.
Step 3: You will need to sign an agreement with the DP in the standard format prescribed by the depository, which details the rights and duties of the investor and the DP. You are entitled to receive a copy of the Agreement and the Schedule of Charges for future reference.
Step 4: Then the DP will open an account and give you the demat account number. It is also known as Beneficial Owner Identification Number (BO ID). All your purchases / investments in securities will be credited to this account. If you sell your securities, your demat account will be debited.
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Many banks and institutions act as depository participants. There are many private financial institutions in the country who are acting as DPs, whom you can approach for opening a demat account and get your demat account opened.
Benefits of Demat Account
Without a demat account, you cannot step into the share market. Keeping the shares in demat account is very beneficial. Let us know what are the benefits of Demat account:
- Shares can be put on hold through a demat account. This is a very easy method.
- Demat account also gets security like bank lockers.
- There is an easy, safe and convenient transfer of shares on sale to a demat account.
- One of the advantages of demat account is that there is no need of paper work in it.
- Transaction cost and stamp duty fees are also reduced in Demat account.
- Through this account you can buy and sell shares from anywhere in the world.
Conclusion:
So friends, now you must have come to know very well about the Demat account. Now you can easily buy and sell shares through Demat account. If you liked this post, then share your Demat account details with your friends as well. If you have any suggestion related to this post then do comment on it. Stay tuned to RNkhabri for more such information, thanks!
