What You Need To Know About Demat Account Opening In India?
You may think that investing in the stock market provides handsome returns. This is a blur perception. The “blurriness” is that the returns from Indian share market aren’t certain. Therefore, entering Indian share market involves risk and therefore demands thorough study of the Indian share market.
And the 1st step is demat account opening. Best demat account is the way towards a convenient stock trading experience. Without having a best demat account, your trading experience in Indian share market will be cumbersome.
The purpose of this article is to help you select the best demat account in India. After you read this you’ll find the process of demat account opening easy.
Demat account | Explained
Demat stands for dematerialized account. It is necessary for a person to have demat account to be able to deal in Indian share market. This compulsion is under the authority of SEBI (Securities and Exchange Board of India). Demat account differs from a usual bank account. Demat account is only used to buy and sell shares. The 2 important aspects of demat account are-
1. Depository- responsible for facilitating storage of securities in the electronic form. Simply, it is like a bank which holds your money safely. Therefore, the depository stores your stocks, bonds, debentures etc safely in an electronic form.
2. Depository participant- A depository participant acts as an agent who is hired by the depository. He/she is responsible for handling the client’s demat account. Also there are other institutional partakers like share brokers and financial institutions like banks.
Demat account opening | Pre-requirements
Before demat account opening, it’s necessary to have a depository participant. One is permitted to open as much demat accounts as he desires based on the offered quality service. It’s also possible to open a demat account under the name of the joint holders. This particular facility favors only 3 holders which is the main holder and 2 joint holders.
A minor is eligible to open demat account but the account is to be handled by a guardian until minor turns major. The minor’s father or mother or both are liable to operate the minor’s demat account. The demat account however will be under minor’s name. Also another thing to note is that the minor can’t be a joint account holder.
Demat account opening online-
When it comes to demat account, you should always enable the facility of online transaction.This enables the person to access his account from anywhere. Additionally, it enables one to conduct transactions in Indian share market which are the shares listed on Bombay Stock Exchange and National Stock Exchange. All you need to do is login and begin trading.
Selecting best demat account-
In order to select the best demat account in India, cost factor is a prominent factor to be considered. Apart from account opening charges you should also look for free maintenance charges. If there are charges required then ensure that they are low and not exorbitantly high.
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