Have you ever come to the question of what is a Demat Account (Open Demat Account)? And how does it work? You guys must have seen many articles and posts on the Internet, but you would not have got information on any website. Through this post, we will make you aware of what is a Demat account and the benefits arising from it.
Only through a Demat account can people buy or sell stock market shares. To open this account, you have necessary to have a PAN card. Without a PAN card, you cannot open a Demat account.
A few years ago, whenever you bought company shares, that company sent you some papers related to those shares. Those papers were proof that you have invested in that company and are buying shares, but everything has changed since the arrival of the Demat Account. So, let’s know what this Demat account is and why it is so important to know its full details.
What is a Demat Account?
People use Demat accounts to buy or sell shares. Just as people keep their money in a bank account, they keep their claims in a Demat account.
When we withdraw money from our bank account, we get it physically. But as long as they are in the bank, it is a digital currency. Whenever we make a payment from a debit card, we also use digital payment, i.e. electronic money transfer. Similarly, when we have shares in the Demat account, we can digitally transfer them to another person’s account. In such a situation, we do not need to keep the shares in physical form.
In other words, the facility of digitally holding shares electronically is called Demat. The full name of the Demat is “Dematerialize “. The process of converting securities into physical form is called dematerialization.
As I said earlier, whenever you used to buy a share in the old times, the company sent you documents related to that Share. It was proof that you had invested in shares. But the first document used to go to the company’s office whenever you sold those shares. The company saw that when you sold the stock, what was its value, and according to that, you used to get money. This process was complicated and wasted a lot of time. That’s why most people avoid investing in stocks.
But at this time, the world has made a lot of progress. When you buy the shares, they will come to your account shortly after. And if you sell a stock, then its money will be given to you quickly. Nowadays, you do not need a computer to buy or sell shares; you can do everything on your mobile.
To access the Demat accounts, you need a password, and for the transaction, you must enter the transaction password.
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 is information about the documents required to open a Demat and Trading Account in Zerodha. Before applying or applying for a Demat Account, I keep a photocopy or e-copy of all these documents ready:
- PAN / Pan Card
- Based on Card / Aadhaar Card
- Two passport-size photos
- Cancellation Czech ( Cancelled Cheque ) / savings bank account passbook (Savings PassBook)
How To Open A Demat Account In Zerodha?
Here, I will provide information about opening a Demat account in Zerodha, which you can follow.
- Go to the Zerodha website and click ‘Open an account or Open an Account’.
- Fill in the details- you fill up everything like your full name, mobile and email and click ‘Call me’.
- You will get a call from Zerodha’s Local Representative, who will book a meeting to sign the account opening form and collect your documents. You have to decide when you can give time for it.
- Pay an account opening fee using NetBanking or a Card. The information of which will be given by the representative.
- After submitting the document, your Demat and trading account will be opened in 4-7 days.
If you want to invest your money in the Share Market, you can create your account on the Discount Broker “Zerodha”. You can open a Demat Account quickly and efficiently and buy shares. The link below is given.
How Many Rupees Does It Take To Open A Demat Account?
You’re mistaken if you think you must spend a lot of money to open a Demat account. You can open a Demat Account with a lot of ease in just 300 to 700₹ and start investing in shares.
You only have to spend 300 or more to open a Demat account. But to run a Demat account, the DP charges you various fees. There is a separate fee for everything. This fee may vary from company to company.
The first fee that is charged in this is the account opening fee.
After this, the fees charged for managing the account are Annual Management fees. The company takes this fee initially, organizes the account throughout the year, and looks after it.
Custodian fees depend on your share number. The company takes it in one go or charges it monthly. The period for taking the price depends on the company.
Transaction fees mean exchanging a share in two Demat accounts charges a fee. That fee can be according to the number of shares or price.
If you are new to the market, you will be advised to get help from a broker before investing.
Who Will Open The Demat Account?
Two institutions are working to open Demat accounts in India, first NSDL (National Securities Depository Limited) and second CDSL (Central Securities Depository Limited ). More than 500 agents of these depositories are called depository participants. Their job is to open an account. They are also called DPs in ordinary language.
The DP doesn’t need to be a bank; only he can open a Demat account. Apart from this, many institutions can open a Demat account. Some of these major organizations are sharekhan, India Infoline, etc.
You can open an account by going to their office or open a home-based Demat account online with the help of the Internet. The process is straightforward. But to open it, a PAN card is mandatory; remember that.
Benefits Of Demat Account
There are many benefits of a Demat account, but let us know some of the significant benefits of a Demat account:
After buying shares through the Demat account, they being stolen or cheated are negligible as all the shares are in electronic means. It is safe because the risk is shallow in it.
It used to take a lot of time to transfer the shares. It also used to take months. But now, it is not so; you can immediately transfer them from Demat accounts. Shortly after sending, it appears in the person whose Demat account has been sent.
Earlier, it was tough to sell shares; you had to sell shares only in a group. You could not sell an odd number of shares with this, but now it is not. You can also sell one single Share through a Demat account.
Now you have opened a Demat account, you can nominate the account personally. It was not like before when there were certificates for the first Share.
FAQ About Demat Account
No, you cannot make your Demat account in the name of someone else, but you can give your shares to someone else or transfer them to his account for all this; that person should also have a Demat account. Is.
You can keep more than one Demat account, just like a bank account. But in a company, you can open a maximum of three accounts.
To open a Demat account, you must have a PAN card. Only through this will you be able to open your account. Apart from this, you must keep this document with you to open an account.
Voter card
Passport
Ration card
Driving license
Phone bill
Electricity bill
Before investing shares with a Demat account, understand the market once. Only then invest. If you are new to this thing, please seek the help of a Broker. The broker sells and sells shares at your location. They have a good understanding of the market. They charge a small fee for your profits and buy or sell shares by representing your account at your place.
What Did You Learn Today?
I hope you have liked this article about my Demat Account. It has always been my endeavour to provide complete information about the Demat Account to the readers so that they do not have to search on any other sites or the Internet in the context of that article.
This will also save them time, and they will also get all the information in one place. If you have any doubts about this article or want there to be some improvement in it, you can write low comments. If you have questions about the Demat account, please comment in the comment box and let us know.
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