How to open Demat Account?

What is a Demat Account?

A Demat account, short for dematerialized, is akin to a bank account, but it stores securities instead of money. Before 1996, trading of securities was carried out with papers, which were cumbersome to manage and handle. A Demat account makes this easier as it stores the securities in electronic form and eliminates the hassle of physically handling paper shares. The prime objective of a Demat account is to make the process of holding shares, bonds, Mutual Funds, government securities, Insurance, and ETFs easier.

A Depository Participant (DP) acts as an intermediary between investors and the depository, which electronically stores securities. A Demat Account is opened with these DPs that mainly include NSDL and CDSL. You can move shares from your physical share certificate to your Demat Account as soon as the account is established. After that, the shares are dematerialized and electronically stored in the Demat Account. Via the Demat Account, you may purchase and sell shares, mutual funds, and other securities. The Shares are credited to or debited from your Demat Account at the completion of trade.

 

Step-by-step Procedure to Open Demat Account

The advent of digitalization allows you to open a Demat account from the comfort of your home. The online process provides convenience, security, and efficient management of your investment portfolio. The process of opening a Demat account follows a defined procedure with the following steps:

1. Choose a Depository Participant (DP): Select a registered DP, such as a bank or brokerage firm, to open your demat account.
2. Fill out the Account Opening Form: Provide your details and financial information, and submit necessary documents like identity proof, address proof, and PAN card.
3. Submit KYC Documents: Complete the KYC (Know Your Customer) process by submitting documents to verify your identity and address.
4. Sign the Agreement: Sign the document outlining the terms and restrictions of using the demat account that you have with the DP.
5. Receive Your Demat Account Number: You will receive a unique demat account number upon processing and approval of your Demat application.
6. Link Your Bank Account: Link your demat account with a bank account for seamless transactions.
7. Start Trading: Once your demat account is active, you can start buying and selling securities digitally.

 

Benefits of Opening a Demat Account With AlmondZ Trade

Opening a demat account with Almondz Trade offers numerous benefits for investors. Here are some key advantages:

• Dedicated RM Support: Get assisted by a dedicated relationship manager and a superlative team of experts to make the most of your investment opportunities.
• Guest User Login: Track and monitor the stock prices without opening the demat. Guest user login allows you to surf the watchlist with ease.
• Script Overview: Watch the stock prices and charts. 
• GTA Order Placement: The feature allows traders to place an order without constantly watching or monitoring the stock market.
• Margin and Option Calculator: While the option calculator helps you determine the price of an option based on underlying assets, the margin calculator helps you determine the precise margins for trading futures and options.

 

Documents required for opening a Demat Account

To open a Demat account with AlmondZ Trade, you will need the following documents:

• PAN Card
• Aadhar card, driving license, or passport for address verification
• Signature on white paper
• Income proof (for activation of futures and options segment)
• Bank account proof (canceled cheque or passbook)
• Recent passport-sized photograph

These documents are necessary for the KYC (Know Your Customer) process and to verify your identity and address.

 

Types of Charges for Opening a Demat Account

From Demat account opening to maintenance, there are numerous charges associated with Demat accounts that investors must be aware of. The charges for opening a Demat account include the following:

• Account Opening Charges: A nominal fee is charged by the Depository Participant (DP) for opening a Demat account.
• Annual Maintenance Charges (AMC): A small fee is charged annually to maintain the account. This fee can range from Rs. 300 to Rs. 800 per year.
• Transaction Charges: A fee is charged for every transaction made in the Demat account, such as buying or selling securities.
• Custodian Fee: A small amount is charged per month for the safekeeping of securities within the Demat account. This fee is calculated based on the number of assets held by the firm for you.
• Pledging and Unpledging Fee: Pledging is charged for pledging securities to avail trading limits, whereas unpledging charges occur when shares are unpledged.

 

What are the Benefits of Opening a Demat Account?

Among the many advantages of opening a Demat account are paperless accounts, cost-effectiveness, time-saving, simplicity in tracking, corporate gains, and loan availability. It facilitates the simple purchase and sale of shares, increasing share liquidity. Demat accounts also make it simple to follow your assets and automatically notify you of corporate profits such as stock splits, bonus issues, and rights offers.

 

Conclusion

Besides holding securities electronically, opening a Demat account simplifies the investing process. You can and must open a Demat account and start creating your investment portfolio by submitting the necessary documents. With a Demat account, you can have a seamless trading experience.