How to open Demat Account? What are its Benefits
When you go to invest in the stock market, you are first asked about a demat account (Demat Account). In those who are investing for the first time in the stock market, very few people have demat account information . Many people don’t know what a demat account is. How is demat account opened? What are the advantages of demat account? Not a lot of such information is known to investors. If you are going to invest in the stock market and want to know about demat account, here you will find out all the details related to demat account.
What is Demat Account?
The first question that comes to our mind about demat account is what is demat account? the full form of Demat Account is “Dematerialized Account”. It is a type of account that is useful for transaction in the stock market.
To understand this, we take the example of a saving account. In a savings account, we can deposit our money at any time, withdraw it at any time, and no one can steal that money from there. This is the work of a savings account. That means he maintains a complete account of your money and returns it to you when needed.
Now let’s talk about Demat account. It’s not about money but with your bought and sold shares. When you buy a share, these shares don’t reach you physically directly. Demat account is opened to store it. So that the entire account of the share you have purchased is in the Demat account. When you want to sell the stock, you will be able to sell it directly from your Demat account.
Demat account means an account in which you can store and store your purchased stock, which will have a full account of it. You will be able to sell it when you want. Just like the money deposited in the savings account.
Types of Demat Accounts
Three types of demat accounts are used for trading in the stock market. These are prepared according to the investor’s profile. It is fully looked after by the brokerage firm. Let’s know which ones are the three types of demat accounts.
1) Regular Demat Account
Investors who come to the stock market who are Indians are given regular demat accounts. You can open it by showing some essential documents to any registered broker. The share will be traded as Electronical from this account.
2) Repatriable Demat Account
These Demat account are especially for NRI. Through it they can trade in the stock market. At the same time, they can also transfer funds abroad. Passports, visas, foreign addresses, passport size photos and NRE bank account are essential to open this account.
3) Non Repatriable Demat Account
These Demat account are also for NRI. These are also designed to invest in the stock market. But through this account, the account holder cannot transfer funds abroad. It requires NRO Bank Account. They can open it. Which are income from both India and abroad.
How to open a Demat Account Online?
If you want to open Demat account to invest in the stock market, follow the steps below.
1) Demat Account Opening Documents
You must first have some necessary documents to open a demat account.
– Bank Account
– PAN Card
– Identity Card
– Residence Certificate
– In many cases ITR is also required.
– Passport Size Photo
2) Demat Account Charges
You may also have to pay some fees or charges for opening and maintaining a demat account. So it is important to know about them first.
A) Annual Maintenance Fee: It is charged by the brokerage firm every year to maintain your account.
B) Protection Fee: These can also be charged by the brokerage firm to keep your account and your transaction safe and secure.
C) Transaction Fee: It is entirely up to your brokerage firm to take it and not take it. These can charge each of your transactions accordingly.
Benefits of Demat Account?
1) Having it does not cause you any hassle of handling or losing the stock. It’s saved forever as Electronic in your Demat account.
2) If your shares live in your Demat account, the chances of cheating on you are also reduced. You keep a close watch on your transaction yourself.
3) If you have Demat account, you can easily get a loan.
4) Demat account also saves you the time of wasteful buying and selling your stock.
5) Demat account lets you easily track which stock you bought? What is the price today? No one has tampered with your stock.
If you are making up your mind about investing in the stock market, get Demat account open first. Don’t even step into the stock market world without it. Because that’s the account you’ll be able to keep your shares in and track them.
