A Demat account enables you to hold securities and shares conveniently. It is a digital platform that provides a secure way to invest in the share market by eliminating the risks of damage, theft, and loss of certificates that are associated with the physical form of securities.
Transfer of shares can be done faster and you can access the account easily via laptop, mobile, and other internet-enabled devices. Without a Demat account, it is almost impossible to invest in the share market as most of the brokers don’t deal with physical shares these days.
Therefore, if you want to invest your money in shares, the first step would be to open a Demat account. Read the below Demat account opening procedure for understanding this better:
Find depository service providers
- Two depository bodies viz. CDSL and NSDL hold the securities in both electronic and physical form. For availing depository services you will have to consult a depository partner who is registered with one of these depository bodies.
- Once you approach a DP, you should know the services and fees charged by the DP. You must be able to invest in the securities that you are interested in and the brokerage should be minimum so that you earn enough through share trading.
- After cross-checking the credibility of a DP, you can provide a few KYC documents to confirm your eligibility.
- After that, you will need to fill an account opening form and provide documents like PAN Card, address proof, identity proof documents, passport-size photo, and a canceled cheque to know your bank details.
Opt for an online procedure
- Many depository partners offer a procedure that helps you to open an online Demat account. They allow you to verify the KYC documents online and even provide an online account opening form.
Complete the remaining formalities
- After the completion of the KYC and other formalities, you will have to sign an agreement that contains the rules and regulations stipulated by the depository body with which the DP is linked with.
- Go through this agreement carefully as it contains other details like brokerage fees, AMC, etc. Also, you will understand your responsibilities and the DP’s duties after reading the agreement.
- Upon completion of these formalities, you will receive a unique identification number and BO ID which is also your Demat account number. Use the ID number along with a password to sign-in to your Demat account.
Now, you can invest in shares as you have a Demat account to store them. You will also need a trading account that will help you to trade i.e. buy and sell shares without any hurdles.
The trading account is mostly provided along with the Demat account but you will have to confirm that with your DP first.
Choose one of the discount brokers who facilitate the secure and fast transaction of money and shares. They also help you to maintain your investment portfolio and facilitate easy tracking of your shares through a mobile app.
Apart from that, you can seek the services of a broker who offers a subscription plan that provides maximum products and affordable services in a single package.