Trading in equities is quite common these days and for efficiently tracking and monitoring, having a Demat account is compulsory. Just like the bank account holding your cash, the Demat account will hold your securities. A Demat account will hold your securities in electronic form and will help you in keeping a good track of the securities you have bought and sold. The Demat account will hold all your shares, bonds, mutual funds, IPOs, FDs, exchanged-traded funds (ETFs) in dematerialized form. So to open a Demat account, it is important for you to choose the right depository participant. Your depository participant should be under the recognition of Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL).
For making your Demat account work, you should know about the central depositories i.e. CDSL and NSDL, unique ID, depository participant and portfolio holding. The process of opening the Demat account will require some documents which are proof of identification (voter’s ID, pan card, passport, driver’s license, electricity bills, telephone bills, some passport size photographs etc) and proof of address (ration cards, a bank passbook or statement, verified copies of telephone and electric bills etc.). A Demat account is cost and time effective as it eliminates the need for paperwork and also eliminates the requirement of stamp duty and related procedures. So if you are wondering how to open Demat account, you should keep some pointers in your mind to avoid any kind of problems in future.
Below are some of the points you need to keep in mind while opening a Demat account:
- Link your Demat account with your trading account- A trading account is a must for buying or selling shares in the stock market. So you need to link your Demat account with the trading account. Without the trading account, the Demat account is not of much use as it will just hold your securities only. If you don’t have both, you may choose that depository participant who will offer you both the accounts in the same place.
- Know the charges- Sometimes the customers are fooled because of the hidden charges, so make sure to know the charges while opening a Demat account. Also, do not think that all the depository participants offer the fee or charges, so look for the fee in the first place.
- Add your nominee details- We often tend to ignore the nominee while filling in the details. It is always advised to fill in the details of your nominee for future references.
- Fill in your details correctly- Make sure to double-check each and everything while filling the form and uploading all the documents. In case of any problem, do not hesitate to contact your depository participant. Any kind of errors or unfilled columns will reject your application.
So above are some of the points one should keep in mind while having a Demat account. ‘5paisa’ here will help you out with opening the Demat account in just a few minutes and make everything easy for you.