Demat Account: Meaning, Types, Benefits And how to open Demat Account
Today in this Article we are trying to understand what Demat account? | how to open a Demat account online? and who holds all our Demat account what are the charges for opening a demand account then annual maintenance charges so we’ll see everything
What is Demat Account?
A Demat Account is an Account open with a broker where we can store our Shares and other investments in simple language every on has a Bank Account in Bank account all our cash is you know stored in the form of electronic format as virtual money if you see in Demat account all the shares that we are buying for example if you buy a State Bank Of India share it will be stored in Demat account in an electronic format so that is basically we call it as Demat account
What are the Benefits of Demat Account?
The Demat account can be used to hold Shares, Mutual Fund units that you are buying then government bonds or private bonds then IPOs suppose normally a company comes to the primary market so we call it as IPO you can apply for IPO through your Demat account and depth instruments and gold subscription from RBI exchange-traded funds so everything can be used to hold in Demat account.
so if you see in 1996 before 1996 all the Demat accounts were you know in the form of paper so Demat means dematerialize so they Demat them dematerialize the paper and they bought into an electronic format so that your share whatever that you are buying will not you know will not get a chance to lose or your paper might not tear so all to consider all these things they also made it as a Demat account in the electronic format.
in addition, it also facilitates quick buying and selling because of that after 1996 there were you know more retail investors participate because of the electronic format and quick speed and accuracy of you know saving the Demat accounts and all because of those reasons
How to open Demat account online?
to open a Demat account for free click on the link below and start opening demate account online for free. which is 100% paperless and it will take only 10-15 minutes to open an account. and if you use the link to open an account with upstox.
- Click on the above link and open the Account opening form
- Enter your details like Name, Email id, Phone number, Address, etc, and your PAN number
- Add your bank details
- upload the necessary KYC Documents for Address and identity proofs like Adhar Card, Voter id Card
- E-sign the form through Aadhar linked Mobile number
After submitting the Application, you will receive a confirmation regarding your Account getting opened along with your login credentials.
Who Regulates The Demat Account?
so now let’s try to understand who holds the Demat account so there are two depositories in India who are responsible for holding all our Demat accounts will be with them only they are responsible for holding our Demat account and the securities inside the Demat account so we call them as national securities depository limited NSDL and central depository securities limited CDSL
so all our these are safe with them if you want to sell a particular share you need to enter OTP then only it can be sold it’s a government entity this is again a listed company we will see those things later so now normally we saw that these are the repository who hold the Demat account but if you want to open a Demat account it can be through depository participants so depository participants are the people.
Who interacts with the depository like CDSL and NSDL and with us so they are the middlemen we they are some kind of banks and institutions and discount brokers so these are the people who allow or give you know the facility to open a Demat account with them and they send these securities to the CDSL and they enter the middlemen they get some brokerages.
Charges of Demate Accounts
now let’s come to the charges for opening a Demat account uh it is 200 if you open a Demat account with discount some of the discount brokers and there will be AMC of rupees some 300 it varies depending upon the brokers that you choose so it is up to you to choose a broker there are different kinds of brokers we have a full-service broker we have a discount broker and there are and some banks also offer Demat accounts like SBI
but the disadvantages with the full service broker and banks is that they charge a heavy brokerage amount for example if you do a transaction they charge 0.5 percentage or 0.1 percentage of the transaction which will a very huge money all your profits will be given up by the that kind of full service brokers that is the problem.
But if you go with the discount broker they will not provide all the services that are given by full-service broker here they will give a platform what you can do is you can get the platform and reduce the brokerage from a discount broker and you can avail some research services too there are some external agencies who are dedicated only giving results so you can you know to pay a fixed fee and get the services.
What I recommend if you want to open a discount broker account like Upstox and Groww you transfect for one crore you will be paying only rupees 20 for a per order so and equity delivery is obviously free if you do it for the short term that is also free.
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