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Open a Demat Account
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Introduction

There is no denying the fact that the emergence of the internet has brought about a lot of dramatic changes in our daily lives. We can now sit at home and shop clothes online instead of going to the market and can also deposit bills without standing in a long queue. Not only so, we can even buy and sell equities from the convenience of our houses and receive certificates instantly. And this is all because of online share trading and dematerialized form of storing stocks. So, open an account for online stock trading in India and experience the magic of trading at your convenience.

What is demat account?

Demat account, also known as Dematerialized Account is where you can store your shares and securities in an electronic format. Through dematerialization, physical share certificates get converted into an equivalent number of securities and credited to the investors’ demat accounts.

How to open a demat account?

Only a few steps you need to follow for opening a demat account online.

 

Objectives of a Demat Account

Less paperwork and transaction time: Demat account holds your investments in an electronic format. Hence, it eliminates the requirement of physical certificates and documents related to shares, as a result of which it reduces paperwork and transaction time.

Reduce risk: Physical certificates are difficult to store as they tend to wear out with a passage of time. Additionally, they entail other dangers such as fake certificates and incomplete paperwork. But a demat account eliminates all these risks as it stores your share certificates electronically.

Cut down cost: A demat account also reduces the overall trading cost by eliminating handling charges, stamp duty and much more.

Instant transaction: No need to wait for days and months for your certificate transaction. Now you can receive your certificates in your demat account much quicker, owing to the electronic transaction.

How to convert physical shares into demat?

Open an account with a broking company

Submit your physical certificates to the company

Then the broking company will intimate the depository regarding the request and submit certificates to the registrar of the issuer company

The registrar will then confirm the dematerialization request from the depository

After dematerializing the certificates, the registrar, followed by the depository will update the accounts

Finally, the broking company will update the demat accounts of the investors

Source credit: SEBI

Things to consider while opening a demat account online

Opening account for online stock trading in India is not a very difficult task but certainly tricky. So, here we share with you some of the key points that you must keep in mind for getting justified demat account facilities from your service provider.

 

Brokerage charges and annual fee:

Find out the demat account opening charges, broking charges and annual fee of the company you are going to work with. Broking charge is the fee that you need to pay each time you buy and sell stocks. On the other hand, the annual fee is the amount you need to pay every year for the facilities you receive from the company. Make sure that all the fees charged by the broking house are rational and valid.

 

Technology and trading platform:

Ensure that the broking house you choose has a high-end trading platform with all advanced technologies that will enable you to manage your demat account any time and from anywhere. Find out the speed of the website, navigation, loading time, user-friendliness and availability on all the devices like desktop, tablet and mobile phone.

 

Supporting features:

Ensure that your broking company provides you with the below-mentioned features in addition:

  • Real time price of different stocks
  • Research reports, financial data and history of different companies
  • Current portfolio value and the cost of the portfolio
  • Gain and loss on individual stock
  • A fair idea of annual loss/profit for tax purpose

 

The credibility of the brokerage:

Make sure that the brokerage house you choose for opening a demat account online has relevant experience in the industry and has been successfully generating profit for the investors over the years. If possible, check the background and history of the company in order to check the credibility.