We have entered the digital and globalised age. Long before we discovered the other digital tools, we entered the phase where all our securities became paperless. This was the age of dematerialisation. With the demat account we could trade and store securities without the hassle of storage and trade them without time lags. A trading demat account, short for dematerialized account. It is the demat account full form and is a type of digital repository where your securities are held in electronic form.
Once you open demat account, you enter the world of hassle-free trading through your online demat account on your demat app.
How To Open A Demat Account
The process of opening demat account is simple for everyone. Here is a step-by-step guide:
Step 1: Choose a Depository Participant (DP): A DP is an intermediary that provides demat services. These can be your leading banks, stockbrokers, and financial institutions that offer DP services. This is a necessary step for demat account opening in India.
Step 2: Gather Required Documents: You would typically need the following documents for trading demat account opening:
- PAN card
- Aadhaar card
- Address proof
- Recent passport-sized photograph
- Bank account details for linking your demat and trading account.
Step 3: Fill Out the Application Form: Next, you need to submit your application form along with the required documents to the DP.
Step 4: KYC Verification: The DP will verify your identity and address through KYC (Know Your Customer) procedures.
- Account Opening: Once verification is complete, your Demat account will be activated.
- Link with Trading Account: To trade securities, you’ll also need a trading account. This account is linked to your Demat account and allows you to place buy and sell orders.
Online Demat Account Opening
Many DPs offer online demat account opening facilities. This is a convenient option as it eliminates the need for physical paperwork and can be completed from the comfort of your home. You can simply visit the DP’s website, fill out the online application, and upload the required documents.
Apart from the above steps, you also need to check the DP id for your chosen DP. DP ID means Depository Participant Identification. It is a unique code assigned to each DP.
Once you have completed these steps, you can go ahead and create a demat login in your best trading platform. Though you are looking for how to open demat account, it would help to know more about what is the use of a demat account.
What Is Demat Account And What Is The Use Of It
If you are planning to invest in the Indian stock market, a demat login would come as a mandatory step.
Here are the advantages of having an online demat account in India:
- Electronic Record Keeping: With the help of a demat account, you can record all your transactions electronically. Thus, with online demat account opening, you eliminate all the hassles of paper record storage and maintenance.
- Enhanced Security: Demat accounts are highly secure, reducing the risk of loss or theft. Your demat app login is your point of access to all your securities markets transaction information.
- Efficient Trading: Buying and selling securities becomes quicker and more convenient.
- Dividend Payments: Dividends are directly credited to your bank account linked to the Demat account.
So, your online demat account is a digital wallet that holds your investments in securities, electronically. You can use this for transactions (buying and selling) of assets or securities of various types, like bonds, stocks, commodities, currencies and even certain types of mutual funds (Exchange Traded funds – ETFs).
You might be having more questions about ways to open demat account in India. There are a few common online demat account opening questions answered below:
Can We Open A Demat Account For Minor With A Different PAN Card?
Yes, you can open demat account for a minor with a different PAN card. However, the account will need to be managed by a guardian.
How To Open A Demat Account Offline?
Yes, you can open a demat account offline by visiting your nearest bank branch. However, it is better to open a new demat account online for a better account opening and trading experience.
How To Know Whether I Have Demat Account Or Not?
You can check your demat account status by contacting your DP or by using their online portal.
Can I Open Multiple Demat Account With Same Mobile Number?
Yes, it is possible for you to open multiple demat accounts with the same mobile number. However, each account will require a separate PAN card and KYC (Know Your Customer) verification.
How Much Amount You Can Invest Using Normal Demat Account?
There is no specific limit on the amount you can invest using a normal demat account. However, your investment capacity may be influenced by factors such as your income, risk appetite, and the market volatility.
How To Do Trading In Demat Account?
To trade in your Demat account, use a trading platform provided by your DP. This platform allows you to place buy and sell orders for securities.
How Much Time To Open Demat Account?
The time it takes to open a Demat account can vary depending on the DP and the efficiency of the KYC verification process. However, in most cases, you can open a demat account and start using it within a few days.
How To Find The Best Demat App?
To access and manage your demat login conveniently, you need to look for a reliable Demat app.
Here is how you can choose it among the variety of apps available in the market:
1. Know Yourself First
- How often do you plan to trade? Say, you trade frequently in the stock market. In that case, you might need a demat app with advanced features and faster execution speeds.
- What are your financial goals? You might be looking to invest for long-term wealth creation, short-term gains, or a combination of both. You can take a call accordingly.
- How much are you willing to spend on fees/brokerage? It would be better to compare the pricing structures of different apps to find one that fits your budget.
2. Search And Compare
- Read reviews: You can check other people’s reviews on the app. It would be better to look for feedback on the user interface, trading platform, and overall experience.
- Compare features: It can be better to check features like real-time quotes, charting tools, research reports, and educational resources.
- Security: You can make sure that the app is safe and protects your personal and financial information. This information is usually available in their privacy policy section.
- Customer support: It is better to choose an app with satisfactory customer support. You can look for responsive and helpful support channels.
3. Try Before You Buy
- Many Demat apps offer demo trading demat accounts. This gamification allows you to practise trading without risking real money.
Once you have selected an app, you can follow the above-mentioned steps to open a demat account through the app.
Conclusion
Investing in the securities markets can be potentially rewarding for beating inflation. If you are looking forward to investing in the securities markets, you can start with opening a demat account. Demat account opening is simple and hassle-free. The steps mentioned above in this blog are quick, convenient and simple. You can just keep the important demat account documents ready and start with the demat account opening process with the HDFC Sky app.
