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In India, A demat account is essential for investors beasue it allows investors to store shares and securities (stocks, mutual funds, bonds, etc.), therefore you do not need to keep physical certificate of shares.
Understanding demat account helps you to navigate the share market investment in India. Demat account help investors to keep track of all the shares, funds and bonds in a single place. There are multiple reliable sources in India that provide demat account facility, Bajaj Broking is one of them.
Here are 7 Key Facts You should know about Demat Account in India. Let’s get started.
Demat Account Acts as a Digital Repository for Investments
Demat account in India is an electronically managed storage system that can hold shares, bonds, securities, and mutual funds. Also, this provides a facility to process the bonds, shares electronically without physical process.
With this facility investors need not to worry about the risks that are associated with physical share certificates, like theft, loss, damage due to any reasons, this is right way to manage investment efficiently.
There are multiple demat account providers in India, you can choose from. Bajaj Broking is one of the reliable source that give investors option to manage their investments in easy way.
It is Mandatory for Stock Market Trading
A demat account is necessary in India to invest in equities. If you want to participate in Initial Public Offering (IPO) or you want to pubrchage shares of a listed company in India you need to have Demat account, this helps you to do all the transaction electronically, this also ensure the security and ease.
Without having a demat account, you will not be able to do any transaction in equities, mutual funds or IPOs.
Also Read: How to Transfer Shares from One Demat Account to Another?
Demat Account Opening Process
There is an easy process to open a demat account to start investing in the market.
- Choose DP (Deposotory Participant) – Financial institutions, Banks, Brokerage firms provide facility to open demat account in India.
- KYC (Know Your Customer) – Banks, Financial institutions, brokerage firms ask for KYC to open demat account, you can submit any document like PAN card, Aadhare card, and bank details to complete the KYC.
- Verification – The Bank, Brokerage firms, financial institutions will arrange a quick verification to verify documents and process the demat opening.
- Demat Account Activation – After verifying the KYC, the Bank will activate your demat account and provide BO ID.
Charges Associated with Demat Account – Quick Info
Some providers in India offer zero demat account opening charges, but other charges may apply.
- Annual Maintenance Charges – Demat account provider charges yearly fees to maintain the demat account in India
- Transaction Fees – Demat account provider charges a minimal amount while performing buying and selling transactions
- Dematerialization/Rematerialization Charges – This charge is for converting the physical share into digital and digital to physical.
Also Read: All You Need to Know About Demat and Trading Account Charges
Demat Account and Trading Account
Demat account and a trading account are for distinct purposes, both are required to operate the online stock transaction.
A demat account hold securities in electronics form while trading account enable investors to buy and sell the shares, securities on stock exchange.
Demat Account Can Hold More than Just Stocks
In addition to equities, a Demat account allows investment in:
- Government bonds
- Mutual funds
- Exchange-Traded Funds (ETFs)
- Sovereign Gold Bonds (SGBs)
- Corporate bonds
This makes it a comprehensive solution for managing diverse financial assets.
Also Read: Planning to Open a Demat Account? Top Things You Should Know
Right Demat Account Provider Matters
If you are interested in opening a demat account in India, you should consider the following factors.
- Charges – Compare and understand the charges such as AMC, buying & selling charges across the demat account providers
- Ease of Use – Do your research and compare the interface, choose the one that is easy for you to operate
- Customer Support – Check for customer support if you need any kind of help from the demat account provider
- Additional Features – Looks for additional features to make your experience convenient. Such as research report, trading tolls, other features, etc.
Conclusion
If you want to invest in Indian stock market than demat account is necesserary requirement to start investing in stock market.
It is very important for investors to understand the features and benefits of demat account. Associated charges and regulations to invest in stock market with ease.
As an investor, you need to choose the right demat account provider as per your requirement, so that you can continue your investment without interruption.