Have you ever come to the question of what is a Demat Account (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 people can buy or sell shares in the stock market. To open this account, you have necessary to have a PAN card. Without a PAN card, you will not be able to 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 in that company, but everything has changed since the arrival of the Demat Account. So let’s know what this Demat account is and why is it so important to know its full details in detail.
What is Demat Account – Demat Account
People use Demat Account to buy or sell shares. Just as people keep their money in a bank account, people keep their claims in a Demat account in the same way.
Whenever we withdraw money from our bank account, we get it in physical form. 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 Demat account. In such a situation, we do not need to keep the shares in physical form.
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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 dematerialisation.
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 have invested in shares. But whenever you sold those shares, the first document used to go to the company’s office. 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 as well as wasting a lot of time. That’s why most people avoided investing in stocks.
But at this time, the world has made a lot of progress. As soon as 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 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 a photocopy or e-copy of all these documents ready:
- PAN / Pan Card
- Based 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 you information about opening a Demat account in Zerodha, which you can follow yourself.
Step 1: Go to the Zerodha website and click on ‘ Open an account or 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 the 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.
If you want to invest your money in the Share Market, you can create your account on the Discount Broker ” Zerodha “. In this, you can open a Demat Account very quickly and efficiently and can also buy Share in it. The link below is given.
How many rupees does it take to open a Demat account?
If you think you will have to spend a lot of money to open a Demat account, you are wrong. You can open a Demat Account with a lot of ease in just 300 to 700 ₹ and 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 initially, organises the account throughout the year, and looks after it.
Custodian fees depend on your share number. Either the company takes it in one go or charges it month after month. The period for taking the price depends on the company.
Transaction fees mean that whenever a share is exchanged in two Demat accounts, it charges a fee. That fee can be according to the number of shares or according to their price.
If you are new to the market, you will be advised to 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 ordinary language.
The DP doesn’t need to be a bank, and only he can open a Demat account. Apart from this, many institutions can open a Demat account. Some of these major organisations are sharekhan, India infoline etc.
You can open an account by going to their office, or you can 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; keep in mind 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:
1. After buying shares through the Demat account, they’re being stolen or cheated are negligible as all the shares are in electronic means. It is safe because the risk is shallow in it.
2. Earlier, 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. And shortly after sending, it starts appearing in the account of the person whose Demat account has been sent to.
3. 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 so. You can also sell one 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 should 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 a Broker. The broker sells and sells 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.
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 internet in the context of that article.
This will also save their time, and they will also get all the information in one place. If you have any doubts about this article or want that there should be some improvement in it, you can write low comments. If you have any question related to the Demat account, please comment in the comment box and let us know.
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