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Basics of Demat Account
Convenient Operations
A Demat account is a gateway to easy & quick access to all the statements and investments that an investor does via net banking. It’s so convenient to use and behold the details of your investments that are available to you everywhere. You can access it via any smart device, either smartphone or computer.
You get a permanent sabbatical from the tedious job of holding certificates in physical form. It’s quite convenient to hold and track the performance of investments via only a single account. It would your right-hand game to trace the current position.
Sheer Safety
What fear does lurk in your mind when it comes to safety? Loss of share certificates, thefts, damages, mutilation and all? By having your Demat account, the securities would be under your safe zone only. All the risks get mitigated by having your certificates and investment details in an electronic form.
Even the personal details are completely safe and the investors need not worry about the loss of their information or privacy. So, safety is guaranteed by the Demat account.
Candor Dealings
It's quite easy to deal with a Demat account. Just as your bank account, you can deposit and withdraw the securities from it. At the time of selling the securities, these will be debited from your Demat account and when you purchase the shares then those new shares will be credited to your account.
The holding and operating with the securities in the Demat account is utmost simple and easy. You will not need any expert to learn its candor dealings.
What is Dematerialisation?
Dematerialization is a process by which a person can convert their physical shares and securities into digital or electronic format. With the dematerialization of the physical shares and securities, it becomes easier for an individual to buy, sell, transfer and hold shares. It secures them from any theft and makes it cost-effective at the same time.
What is a Demat Account?
According to the National Securities Depository Ltd. (NSDL), “Dematerialization is the process by which a client can get physical certificates of securities converted into electronic balances”. An investor intending to have to trade in dematerialized securities needs to open a demat account with a depository participant (DP). There are two aspects to a demat account....
Steps to Open Demat Account
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1
Mobile & PAN VerificationFor the statutory compliance all you need to do is verify your mobile with an OTP and upload a clear image of your PAN card for it to automatically verifies your details.
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2
Personal DetailsThis step helps us to know you better. Details about yourself and your family history would help our team to provide you with a personalised brokerage plan and stock recommendations.
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3
Bank DetailsWe want to ensure that you receive your earned money in your bank account only, please help us get the right details.
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4
Payment & ConsentDepending on the volume of transaction you want to do on regular basis you can choose the Plan and Service which suits you best.
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5
Upload Proofs & IPVThe next step is IPV (In Person Verification) which is mandatory. Just create or upload a small 15 seconds video of yourself for this 2-step verification process and making your account more secure.
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6
Review & ConfirmThe last thing is to just review all the details you have filled and confirm to start trading with us. You must sign the agreement with the DP. It is as simple as it can get.
What are the Demat charges
Demat charges may, inter alia, include the following
Account opening charges
Power of Attorney(POA) charges
Dematerialization charges
Annual maintenance charges (AMC) billed each year
Charges for debit to the demat account
Rematerialization charges
Demat Account Benefits
Demat Account Features
Simple and cost-effective
Compared to holding of physical share certificates, demat becomes a lot cheaper and also simpler. Holding all your investments in a single demat account is much better than managing files, folios, certificates etc. Also, there is no stamp duty on electronic transfer of shares, unlike in the case of physical certificates. Demat is also much faster.
Beneficial owner
When you hold shares in demat account you are the beneficial owner of these shares. Unlike in case of physical shares, you are not the registered owner of the shares, which is the depository; NSDL or CDSL. That is why your demat account is also called a BO account.
No Bad delivery and duplicate shares
Two major challenges in the physical holding mode was the problem of bad delivery and duplicate shares. Bad delivery would lead to rejection of delivery instruction on technical grounds and brokers used to have a large team only to handle bad deliveries. Since there are no physical certificates, there is no scope for either fake certificates or for duplicate certificates.
Security via Depositories
One of the concerns that any investors may have is what happens to their shares if the depository participant (DP) decides to wind up its business. The account is opened with a DP but the shares are with the principal depository; NSDL or CDSL. So security and safety of shares is assured.
Automatic corporate actions
This is one of the big advantages of demat holdings. Corporate actions like bonus issues, stock splits, mergers are called involuntary corporate actions which are automatically reflected in your demat account. In case of buybacks and rights, you need to exercise your choice and the rest of the credits are done automatically. Lastly, in case of dividends and interest, the record date is automatically calculated and the interest and dividend amounts are automatically credited to your bank accounts.
Hold multiple asset classes
Demat account is not just about holding equity shares but a number of other financial securities too. Demat account can hold equity shares, fully paid shares, partly paid shares, corporate bonds, government bonds, closed ended funds, open ended funds, gold bonds, index ETFs, gold ETFs etc. All these can be held in a single account itself.
Learn How to Achieve your Goals, Manage your Portfolio and many more with Tradebull's One Stop Solution
Learn How to Achieve your Goals, Manage your Portfolio and many more with Tradebull's One Stop Solution
FAQs
How can I open a Demat account online with Tradebulls?
You can open an online demat account with Tradebulls by using the online demat application facility. You need to be authenticated by Aadhar and it is advisable that you also get an in-person verification (IPV) done either via personal visit or through video conference.
How to operate an online Demat Account?
It is quite simple. You just need to link the demat account to your trading account and your bank account and the rest of the process is quite simpler from there on. You can access your demat account statements online and also give demat instructions to your broker online.
What are the major objectives of a Demat account?
A demat account is meant to simplify the way you hold and transaction in securities. You are saved the hassles of maintaining physical certificates, getting physical transfers done etc. Demat does away with many risks like bad delivery, share certificate mutilation, duplicate certificates, fake shares etc.
What are Tradebulls demat account brokerage, charges and fees?
Demat account charges are available on the website of Tradebulls. There is no account opening charge and the annual maintenance charges are also waived for the first year in most cases. You are charged demat debit charges but demat credits are free of cost.
Why should I open a Demat account with Tradebulls?
At Tradebulls, the demat account gives y you a simple account opening process with the facility to open your account fully online. Tradebulls also offers seamless connectivity with your trading account and bank account to make all your transactions seamless.
