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What is Demat account and how to open it ?

Hello friends, in today’s post we will talk about share account. What is Demat account? How to open demat account? What are its benefits? Whenever we make an idea to invest in Bond, Stock, Share or Mutual Funds, you will definitely be asked a question. Do you have a Demat account? Then you would think that what is a demat account? What is meant by share account?

So friends, today’s post is going to be very useful for you. Because in this post we will answer all the questions related to your share account. You just have to read this post till the last.

Meaning of Demat account ? 

Friends let’s get started knowing the actual meaning of demat account? Demat account means holding shares in digital form. share account is required to hold shares. It is like your bank account, like you keep your money in the bank account, and you can do online transaction of those money.

Similarly, there is also a share account. The only difference between these two is that we keep the share in the share account, and do the online transaction of the share.

What is Demat?

Before knowing about demat account you should to know about that What is Demat? So understanding share account will be easy. The full form of Demat is “Dematerialize”. “Dematerialize” means to separate from the physical elements. Which means working in the share market with no physical document.

When in the early stages of the share market, some paper documents were given to buy and sell shares from the share market. It was only on the basis of these documents that it was known in whose name the share is. At what price and date the share is being bought or sold.

To do all these things, one had to go round the offices of the share market. And these documents had to be taken care of, if this document is lost from you. So you had to bear the loss too.

But gradually the work of share market started going online. Due to which the work of buying and selling shares in the share market started without any documents.Today all the work of share market has become paperless. Now you can also see the shares in digitally (electronic) form in your share account and you can buy and sell the shares sitting at home.

what is demat account

What is Demat Account?

Perhaps you have understood about what is demat. So let’s talk about What is Demat Account? share account is like a bank account in which we can buy shares and keep them in digital form. Just like we keep money in our bank account and can send them digitally to someone else’s account.

The same work is also done through your share account. The only difference is that share account is used to hold shares and securities and to sell or buy shares.

share account is linked with our bank account only. Because we need money to buy and sell shares. Bank account is linked only because So that we can add money to buy shares in the share account and .after selling the stock, we can send the money to our bank account.

Your bank account is definitely linked with share account, but no money is automatically deducted from it. This means to say that whenever you buy and sell any shares from the share market, money will be deducted from your share account and not from your bank account. Whether you have loss in share market or profit bank account has nothing to do with it.

Types of Demat Account ?

There are three types of demat account and which is discussed below.

1. Regular Demat account.

Regular Demat account is for the people living in India, Regular share account is opened for all Indians to invest in share market, you can open them with any broker. This account is opened on the basis of Indian document only.

2. Repatriable Demat account.

Repatriable Demat accounts are for Non-Resident Indians (NRIs). These Repatriable Demat accounts are opened for those NRIs who want to invest in the Indian share market. To open a Repatriable share Account, NRIs need to provide passport, PAN card, visa, their address abroad, passport size photograph as well as FEMA declaration and a canceled check of NRE or NRO account.

3. Non Repatriable Demat Account.

Non Repatriable Demat Account is only for NRIs but with this account you cannot transfer money to foreign account. An NRO Bank Account is required for this account. This account is for those people whose income is both in India and abroad. NRO account is used to manage earnings in the country and abroad simultaneously.

Demat Account Benefits.

Well friends, there are many benefits of opening a demat account, but I would like to tell you the main benefits and they are as follows –

  1. If you have a share account, then through that account you can invest in shares, bonds, mutual funds, and other securities sitting at home. You don’t have to run anywhere for this.
  2. Whenever you buy shares through share account and keep them digitally in your account, then you are saved from the risk of those shares being stolen.
  3. In earlier times, a lot of time and paperwork had to be done to buy and sell shares. But by having a share account, you get rid of all these troubles.
  4. You can buy and sell shares from any place with the help of share account.
  5. You can buy and hold many different shares in a single share account. Whereas earlier, separate documents of all the shares had to be maintained.
  6. The documents of the shares are saved from theft, spoilage, and fraud, because the stocks are kept in electronic form in the share account.
  7. With share, you do not have to spend any kind of paperwork in buying and selling any shares.
  8. Earlier it used to take a lot of time to buy and sell shares. But with share, you can buy and sell shares in minutes. This saves you a lot of time. 

Where to open demat account?

Only two organizations have been given the right to open a demat account, CDSL or NSDL. This right has been given by SEBI (Securities and Exchange Board of India). NSDL means (National Securities Depository Limited), and CDSL means “Central Depository Securities Limited”, both of them have share accounts opened.

There are more than 500 (Depository Participants) DP Register available with CDSL and NSDL, you can open your share account with any of them. You can open a share account with anyone. Your account will remain inside SEBI and all the responsibility remains with SEBI.

If you search online, you will find many brokers where you can open a share account. But friends, I would like to tell you the names of some DP Registers where you can open demat account.

Following are the names of DP Register to open Demat account

  • Zerodha 
  • Angel broking 
  • 5paisa 
  • Upstox 
  • sher khan 
  • Astha trade 
  • Motilal Oswal 

Apart from these, in today’s time all the banks also open share account, but there is more charge in opening the share account in the bank, so everyone likes to open the account with the third party (broker).

Demat Account Opening Charges.

All DP Register charges are different for opening Demat account. This charge can range from 300 to 700 rupees. And some DP Register even open Share Account for free like 5paisa. There is no charge for opening a share account in 5paisa. But AMC (Annual Maintenance Charge) all take it. Which can be around 400 to 500 rupees.

There are many brokers in the market to open a share account and will also give you various offers. Open it for free and do not start all the services of the account and later charge you for starting those services.

Important documents for opening demat account.

You must be above 18 years of age to open a demat account. And you must have the following documents. If you have all these documents then you can open share account. It is very important for you to have a PAN card, without this you cannot open a share account.

  • Identity Proof
  • Address Proof
  • Proof of Income
  • PAN Card
  • Photographs
  • Cancelled Cheque
  • 6 month Account statement 

How to open Demat account ?

How to Open Demat Account – Opening share account online is very easy task. You just have to follow the following steps –

  • First of all, add a soft copy of all the documents to your mobile or computer.
  • Now go to the website of the Depository Participants with whom you want to open your share Account.
  • There will be an option of Sing-up on that website, click on it.
  • Now you have to fill your personal detail whatever is being asked, fill all the details on the basis of the document itself.
  • Verify mobile and email through OTP.
  • After that upload all the documents.
  • Now you are selecting the plan, pay it.
  • Document verification may take some time, so wait a while. Once your documents are verified, your share account will be opened.

This is all the process in opening a share account online. Whether you choose any Depository Participants.

 

What is Demat account?

It is a account where you can hold shares in digital form.

Which bank is best for Demat account?

Top 5 banks-
1) SBI Bank Demat and Trading Account.
2) ICICI Bank share and Trading Account. ICICI Bank is a leading private bank in India.
3) HDFC Bank Demat and Trading Account.
4) Kotak Bank share and Trading Account.
5) Axis Bank share and Trading Account.

Is Demat account free?

Yes, you can open a demat account for free in applications like 5 paisa and such others.

How can I buy shares?

Get a PAN card. In order to buy shares, the first is to get a pan card.
Find a Good Broker. The second step to buy shares is to find a broker.
Get a Demat and Trading Account.
Depository Participant.
UIN – If You Want to Invest Big.
Choose the Right Share and Purchase.

Friends, what is Demat Account? How to open share account? What are its benefits? How much is the charge for opening a share account? You must have got the answers to all these questions.

How did you like this article, do tell in the comment. If you have any question related to share account then definitely ask in comment and share this article with your friends. Thank you

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