The Indian stock market lays out new opportunities for every trader who is willing to put his money in the investment pits! College students, young professionals, experienced business people, and retired individuals can all buy shares and securities from the stock market. The offline trading process observed a lot of backlash from the traders and criticism when the market was at its peak! Online trading services and the facilities of a Demat and trading account have made the investment process easier! Yes, one can trade online using these two accounts, but the importance of the former is greater than the latter one! With Demat Accounts, there is no facility to store all shareholdings online.
A Demat Account offers numerous facilities to the share and stock traders at a low cost. The existence of over two dozen Depository Participants in India leads to an organic competition in the industry to extend the quality services. One can only end up with the most reliable DP available in the market is through a complete analysis. Traders can avail a handful of services and perks from this online account. One must note down the account opening process and everything else it takes to start it.
Following the stock market trends is also easier with online Demat and trading accounts.
Demat Accounts: A Necessity For Online Trading
The NSDL came up with the idea of offering Demat Accounts to facilitate electronic storage through dematerialisation. It gives convenient access to the traders to have a brief look at all of their shareholdings on one dashboard. The only thing the DPs demand is the payment of the nominal maintenance charges that are compulsory. Every investor who wants to reap the advantages and perks of online stock market trading has to open an account by choosing the best DP.
Facilities of Opening A Demat Account
Demat Accounts help the traders to dematerialise their physical shareholding certificates to the electronic/Demat format. With the help of this online form of shareholdings, one can conveniently transfer the certificates after buying/selling the shares. Gone are the days when traders had to send postal packages to their buyers. From that slow and time-consuming service to this fast and accessible one, the share market has come a long way!
- The primary service of the Demat Accounts is to provide a convenient electronic storage facility to the accountholders.
- It was the initiative of the SEBI in 2011to make it mandatory for investors to buy/sell shares in Demat form. Thus, it gives liberty to the traders to perform their investment transactions with the help of a stockbroker!
- The stock market traders get access to the trading portals and mobile apps offered by the DP after the account is active.
- Most of the traders believe that this account serves only as a storage facility for shares and securities. But the depositories took it a notch up and enabled the e-storage service for mutual funds units too!
- The trading portfolio is one of the vital services that help investors in evaluating their trading performances and create a presentable profile for themselves in the market.
Documents Needed For The Account Opening Process
Traders need to come up with the necessary documents demanded by the DP to complete the account opening process.
Address Proof: One may need to provide a scan or photocopy of his ration card, Aadhar card, passport, voter ID card, driver’s license, gas bill, electricity bill, etc. In some cases, copies of bank statements or any type of insurance may also help.
Identity Proof: PAN card or a document with the Unique Identification Number (UID), identity cards issued by a recognised government authority, ration cards, etc., are the documents that work as identity proof. However, some depository participants might just consider the central government eligible for the identity card category!
Income Proof: Salaried individuals must provide the bank statement of their salary account and the salary slip. For self-employed individuals, a copy of a recent ITR statement is accepted. Traders who fail to produce any of these income proofs must consult their DP for an alternative.
Steps To Open The Demat Account Online
One can open the Demat Account online easily by following a few easy instructions.
- Go through the features of the accounts offered by the Depository Participants to compare and choose the best one.
- Visit the official website of the preferred DP and fill the online form.
- Submit the online form with the scanned copies of all the necessary documents like Aadhar card, PAN card, passport, etc.
- Go through the e-KYC verification round to fulfil the formalities.
- Provide a digital signature on the forms to acquire the account number.
Demat Accounts have changed the face of stock market trading by raising it from the pitfall it faced during the initial years. One can make the most of this useful service by choosing the most reliable DP available in the market. Go through the list of all these benefits to make a choice!