What is Demat Account?

As per SEBI instruction for an individual to trade in stock market one is supposed to own a demat account which is a short and popular form of dematerialized account. In India, concept of demat account was adopted in 1996 and because of fast and safe transaction of securities it become popular among all the related entities. Demat account is used for holding securities in electronic form and their transactions too, one need to open demat account with depository participants, because of several advantage over older version of trading , the concept of demat account played an important role to attract new investors inshare market. Using of demat account not only makes transactions safe and fast but it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation. Demat account popularly used short name for dematerialised account, is something you would require in case you wish to online purchase and sale of securities such as stocks, mutual funds, gold etfs, etc. Although you have the option of receiving securities in physical or demat mode, it would be advisable for you to receive the dematerialized form of your security. Demat account and its functioning resembles that of a bank account. Just the way a savings bank account holds money, a demat account holds securities. It helps in holding securities electronically, or in other words, in dematerialized form. This feature helps in doing away with all the negative points of physical possession of securities. In addition, a periodic statement of transactions and holdings is also provided by the Depositary Participant (DP) that is similar to bank statement or passbook

How to Open Demat Account for Online Trading

Online trading means that you can trade during the trading hours from wherever you feel like. As we all know, you cannot carry out onlicenario, online trading is the norm of the day, given the convenience it provides. Demat account opening is very simple. All you are supposed to do is to approach a DP registered with SEBI, the regulator of Indian Stock Market. Demat services are presently being offered by all stock broking houses, as well as several financial and banking institutions. These stock broking firms also offer depository services and, thus, also known as depository participants. By definition, a depository participant is an intermediary between depositories, like NSDL and/or CDSL, and an investor. Demat account has to be opened while registering with a share broker or a sub-broker. There are just 4 simple steps for demat account opening:

Select & approach a certified DP (eg. ShareKhan, HDFC Securities, Unicon Securities, IIFL etc.)

Fill up demat account opening form given by the DP.

Attach xerox copies of proof of address and proof of identity along with the demat form.etc.)

Produce your original PAN card during demat account opening.

Power of Demat A/c + Online Trading A/c

Opening a trading account along with opening demat account is highly recommended. Following are the things that you will be able to do with just few clicks once you have a demat and an online trading account. Nowadays, practically all trades have to be settled in demat form. Although the market regulator, SEBI, has allowed trades of up to 500 shares to be settled in physical form, nobody wants physical shares any more. So a demat account is a must for trading and investing in the Indian share market.

Opening a demat account for trading in the Indian share market is as simple as opening a savings bank account. You have to approach a Depository Participant (DP) to open a Demat account. Most banks and share brokers that offer share trading services are DPs.

Discover the power of Online trading + Demat account:

It is highly recommended that you also open an online trading account (if possible) when you open a Demat account. Here is a list of things that you can do with a few clicks once you have a Demat account and an online trading account linked to it. Purchase and sale of shares and stocks of any company on BSE and NSE Online investment in mutual funds online without any paper work Investment in Gold through Gold ETF's Online IPO (Initial Public Offer) subscription Online trading in Futures and Options Investment in Liquid BeEs