Have you ever come to the question that what is Demat Account ? And how does it work? You may have seen many articles and posts on the internet about it, 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 Demat account, people can buy or sell shares in the stock market. To open this account, you must have a PAN card. Without PAN card , you will not be able to open a demat account.
A few years ago whenever you bought shares of a company, that company used to send you some papers related to those shares. Those papers were proof that you have invested in that company and are buying shares in that company, but everything has changed since the arrival of Demat Account . So let’s know what is this demat account and why is it so important to know its full details in detail.
What is a 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.
Whenever we withdraw money from our bank account, we get it in physical form. But as long as they are in the bank, they are digital currency. Whenever we make a payment from a debit card, we also use a form of digital payment ie electronic money transfer. Similarly, when we have shares in Demat account, we can digitally transfer them to another person’s Demat 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 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 used to send you documents related to that share. It was proof that you have invested in shares. But whenever you sold those shares, the first document used to go to the company’s office. It was seen by the company that when you sold the stock, what was its value and according to that you used to get money. This process was complicated as well as wasting a lot of time. That’s why most people avoided investing in shares.
But at today’s time the world has made a lot of progress. As soon as you buy shares, it will come into your account shortly after. And if you sell a stock, then its money will be given to you in a short time. Nowadays, you do not even need a computer to buy or sell shares, you can do all this from your mobile.
To access the demat accounts you need a password and for the transaction you have to 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 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 / Pan Card
• Aadhaar Card
• 2 passport size photos
• Canceled Check / Savings Bank Account Passbook
How to open Demat Account in Zerodha ?
Here I will provide you information about the method of opening demat account in Zerodha, which you can follow yourself.
Step 1: Go to Zerodha website and click on ‘ Open an account’ or Open an Account .
Step 2: Fill in the details- Here you fill up all the things 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 .
Note: – If you are submitting the form online, then you have to send the filled application to the given address (Zerodha’s official address).
How many rupees does it take to open a demat account ?
If you are thinking that you will have to spend a lot of money to open a Demat account, then you are wrong. You can open a Demat Account with a lot of ease from 300 to 700 ₹ and can start investing in shares.
To open a demat account, you only have to spend 300 or more rupees. But to run a demat account, the DP charges you a variety of 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 in the beginning and manages the account throughout the year and looks after it.
Custodian fees depend on your share number. Either the company takes it at once or it charges month after month. The period for taking the fee depends on the company.
Transaction fees means that whenever a share is exchanged in two demat accounts, the company charges a fee for it. That fee can be according to the number of shares or according to their price.
If you are new to the market then you will be advised that you must get help from a broker before investing.
Who will open demat account
Two institutions are working to open demat account in India, first NSDL (National Securities Depository Limited) and second CDSL (Central Securities Depository Limited ) . There are more than 500 agents of these depositories who are called depository participants. Their job is to open an account. And they are also called DPs in common language.
It is not necessary that the DP should be a bank and only he can open a demat account. Apart from this, there are many institutions that can open a demat account. Some of these major organizations are sharekhan, india infoline etc.
You can open an account by visiting their office or you can open a home-based demat account online with the help of internet. The process is very simple. But to open it, PAN card is mandatory, keep in mind that.
Benefits of Demat Account
There are many benefits of a demat account, but let us know some of the major benefits of a demat account:
1. After buying shares through demat account, the chances of their being stolen or cheated are negligible as all the shares are in electronic means. It is safe because the risk is very low in it.
2. Earlier it used to take a lot of time to transfer the shares. It also used to take months of time. But now it is not so, you can immediately transfer them from demat accounts. And shortly after sending, it starts appearing in the account of the person whose demat account has been sent to.
3. Earlier it was very difficult to sell shares, you had to sell shares only in a group. With this, you could not sell an odd number of shares, but now it is not so. You can also sell 1 single share through a demat account.
4. Now you open a demat account, you can nominate the account personally. It was not like before that there were certificates for the first share.
FAQ about Demat Account
Q. Can I make my demat account in someone else’s name?
A. No, you cannot make your demat account in the name of someone else, but you can give your shares to someone else or you can transfer it to his account, but for all this, that person must also have a demat account. is.
Q. How many demat accounts can I keep together?
A. 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.
Q. What documents should be there to open a demat account?
A. To open a demat account, you must have a PAN card. Only through this you will be able to open your account. Apart from this, you must keep this document with you to open an account.
- Voter card
- 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 Broker. Brokers sell and sell shares at your location. They have a good understanding of the market. They charge a small fee from your profits and buy or sell shares by representing your account at your place.
In this post, we have tried to share with you all the information related to what is a Demat Account . If you have any question related to the demat account, please comment in the comment box and let us know.