In this article, we will cover
- What is a Demat Account?
- Prerequisites to Open a New Demat Account
- Essential Documents
- Things to Consider Before Opening a Demat Account
What is a Demat Account?A demat account is a type of account that enables investors to store digital copies of all the shares they have purchased. Since share certificates can no longer be held in physical form but rather must be kept in digital format in a demat account, having a demat account in India is now required. In order to prevent concerns with forged shares, every share certificate is held in digital format in the demat account and is connected to the NSDL or CDSL. Bonds, mutual funds, and other financial investments, in addition to holding shares, can also be stored digitally in a demat account. A trading account is an additional requirement for stock investment. An investor with a trading account has access to stock exchanges where he can purchase and sell shares. An investor purchases or sells shares through a trading account, and the purchased shares can subsequently be stored in the best demat account in India in digital form.Check our Video on What is demat account?
Prerequisites to Open a New Demat AccountYou can open a demat account online in accordance with a number of requirements that are necessary. Before applying and beginning to trade, you need to be aware of things such as the fees and documentation.
Account Opening FeesWhile opening and using the account, you will learn about the many types of charges. There are mostly 3 that you will probably encounter.
- Annual Maintenance Fees
- Account Opening Fees
- Transaction Fee
Essential DocumentsDemat account in India requires the same documents as are required to start a trading account. You will require an ID proof, address proof, and PAN card in order to open a demat account. In addition to a PAN card, which is a prerequisite, you will mostly need two documents.Identity ProofTo proceed, you need to provide a photocopy of one of the following government-issued identification documents:
- Driving License
- Pan Card
- Voter Card
- Aadhar Card
- Ration Card
- Voter ID Card
- Electricity Bill
- Driving License
Things to Consider Before Opening a Demat Account
A demat account is mandatory for trading in the Indian stock market
A demat account is different from a trading account
You need a broker to open a demat account
Refer and Earn Demat Account
You can have multiple demat accounts
You can link multiple trading accounts to a single demat account
Demat accounts can be opened in different modes
Demat accounts require KYC compliance
Demat accounts have maintenance charges
Demat accounts have transaction charges
Demat accounts offer multiple modes of access