What is Demat Account, How to Open and What is the benefit ot Demat Account

What is Demat Account? A Demat account is an account that maintains financial security electronically. In India, Demat accounts are operated by two depository companies, National Securities Depository Limited and Central Depository Services Limited.

A Demat account is an account that maintains financial security electronically. In India, Demat accounts are operated by two depository companies, National Securities Depository Limited and Central Depository Services Limited.

Have you ever wondered what is Demat account? And how it works? Through this post, we will let you know what is a Demat account and how you can benefit from it.

People can buy or sell shares in the stock market only through the Demat account. You must have a PAN card to open this account. You cannot open a Demat account without a PAN card.

Every time you bought shares in a company a few years ago, that company sent you some documents related to those shares. These documents were proof that you had invested in that company and bought shares in that company, but everything has changed since the Demat account appeared.

So let’s find out what is Demat account and why it is so important to know the details.

What is Demat Account

what is Demat Account

Demat Account is used by people to buy or sell shares. Just as people keep their money in a bank account, in the same way people keep their shares in a Demat account.

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Every time we withdraw money from our bank account, we receive it in physical form. But while they are in the bank, they are digital currency. Whenever we make payments from a debit card, we also use a digital form of payment, that is, electronic money transfer. Similarly, when we have shares in a Demat account, we can digitally transfer them to someone else’s Demat account. In such a situation, we do not need to keep our actions physically.

In other words, the advantage of having digital shares electronically is called Demat. Demat full form is “dematerialized.” The process of converting values ​​into physical form is called dematerialization.

As I said before, every time you bought a part in the old days, those companies sent you documents related to that part. It was proof that he had invested in stocks. But each time he sold these shares, the first document would go to the company’s office. The company noted that when it sold the stock it was worth what was paid accordingly. The process was complicated, in addition to wasting a lot of time. That is why most people avoid investing in stocks. 

But today the world has improved a lot. It will be credited to your account as soon as you purchase the shares. And if you sell any stock, the money will be paid to you in no time. Today, you don’t need a computer to buy or sell your shares, you can do all of this on your mobile phone.

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You need a password to access Demat accounts and you must enter a transaction password for the transaction.

How to open your Demat and trading account in Zerodha?

Documents required to open a Demat and trading account in Zerodha.

Documents that are required: –

Below you will find information about the documents required to open a Demat and Trading Account in Zerodha. Before applying or applying for Demat Account, I keep photocopy or e-copy of all these documents ready:

  • Pan Card
  • Aadhaar Card
  • 2 passport size photos

Cancellation Czech ( Cancelled Cheque ) / savings bank account passbook (Savings PassBook)

How to open Demat Account in Zerodha?

Here I will provide you information about the method of opening a Demat account in Zerodha, which you can follow yourself.

Step 1: Go to Zerodha website and click on ‘ Open an account’ 

Step 2: Fill in the details- Here you fill-up everything like your full name, mobile, and email and click on ‘ Call me ‘.

Step 3: You will get a call from Zerodha Local Representative, and he will book a time to meet with you to sign the account opening form and collect documents from you. Which you have to decide when you will be able to give time for it.

Step 4: You have to pay an account opening fee using NetBanking or Card. The information of which will be given by the representative.

Step 5: After submitting the document, your Demat and trading account will be opened in 4-7 days.

How many rupees does it take to open a Demat account?

If you think you have to spend a lot of money to open a Demat account, you are wrong. You can easily open a Demat account for Rs 300 to Rs 700 and start investing in stocks.

You only need to spend 300 or more to open a Demat account. However, to run a Demat account, DP offers different types of fees. There is a separate fee for each item. These rates may vary from one company to another.

The first charge is the account opening fee.

After that, the fees charged by the account administration are the annual operating fees. The managing company initially takes these fees and manages and maintains the account throughout the year.

The custody fee depends on your number of shares. Either the company takes it immediately or charges it month after month. The duration of the rate depends on the company.

The transaction fee means that every time a share is exchanged between two Demat accounts, the company charges a fee for it. That rate can be according to the number of shares or their price.

If you are new to the market, you will be informed that you should seek the help of a broker before investing.

Who will open Demat account

Two institutions are working to open a Demat account in India, first NSDL (National Securities Depository Limited) and second CDSL (Central securities depository limited).

These depositors have more than 500 agents called depositors. Your job is to open an account. And these are called DPO in common parlance.

The DP must not be a bank and only he can open a Demat account. Apart from this, there are many institutions that can open Demat accounts. Some of these big companies are Sharekhan, Bharat Infoline, etc.

You can open an account at your office or you can open a Demat account at home online with the help of the Internet. The process is very simple. However, it is mandatory to open the PAN card, remember that.

Benefits of Demat Account

There are many benefits to a Demat account, but here are some major benefits of a Demat account:

1. After buying shares through a Demat account, the possibility of theft or fraud is negligible since all the shares are available electronically. It is safe because the risk is very low.

2. It used to take a long time to transfer the stock. It took a few months. But now it is not, you can instantly transfer them from the Demat account. And very soon after the remittance, it begins to appear in the account of the person to whom the Demat account was sent.

3. Before it was very difficult to sell shares, you only had to sell shares in a group. You cannot sell an odd number of shares with him, but that is not the case now. You can also sell 1 individual share through the Demat account.

4. Now that you have opened a Demat account, you can nominate the account in person. There was no such thing as a certificate for the first part.

FAQ about Demat Account

Q. Can I create my Demat account in someone else’s name?

A: No, you cannot create your Demat account in someone else’s name, but you can give your shares to someone else or you can transfer them to your account, but for all these things that person must have a Demat account. Is.

Q. How many Demat accounts can I keep together?

A. You can have multiple Demat accounts such as bank accounts. However, you can open a maximum of three accounts in one company.

Q. What are the necessary documents to open a Demat account?

A. You must have a PAN card to open a Demat account. Only then can you open your account. In addition to these, you must have this document with you to open an account.

  • Voter card
  • Passport
  • Ration card
  • driving license
  • Phone bill
  • electricity bill

The market must be understood once before investing shares in a Demat account. Only then invest. If you are new, consult a broker. Brokers sell and sell shares in their position. They have a good idea of the market. They take a small fee from your winnings and buy or sell shares by presenting your account instead.

Conclusion

I sincerely hope that I have given you complete information about what is Demat account and hope everyone understands about Android version.

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