What is Demat Account? : There are many people in our country who want to earn maximum amount of money in a short span of time. For this, they invest in the stock market, although the risk in the stock market is very high. Despite this, the number of people investing in the stock market is increasing day by day. For your information, let us tell you that you must have a Demat account to invest in the stock market.
Now in such a situation the question comes out that what is a demat account. Apart from this, when I already have a savings account, then a demat account is required, in fact, a demat account is required for buying and selling shares. To know how to open a demat account, read the complete post till the last.
What is Demat Account?
The way our bank account works, in the same way a demat account also works, the way currency is not physically kept in your bank, but the entry of your money is taken. Similarly, in the demat account, the accounting of the book is maintained according to the share. In this, the demat account keeps track of the transactions related to your mutual fund band and shares, when you make a sale, it is deducted according to you. The amount received after the sale of shares comes to your savings account.
A Demat account helps investors to hold shares and securities in digital or electronic format. Demat accounts in our country are maintained by two depository participants National Securities Depository Limited and Central Depository Services Limited.
Its most important thing is that you do not have to pay any kind of fee for opening a Demat account. Even the customers do not need to maintain minimum balance. Investors should have their own demat account to invest in the share market.
Importance of Demat Account
- Provides the security of holding shares and securities in digital form.
- instant transfer of shares
Benefits of Demat Account
- Eliminates the risk of paper based scrip certificates. But with Demat account all these have been abolished.
- Exists in the form of physical papers or certificates if you have a dozen paper certificates to keep safe. Here there is a possibility of tampering, theft, loss and forgery in these documents.
- Also, transfer of shares used to involve lengthy paperwork. With a demat account, you can store all these shares in electronic form.
- So that you can trade in volume and monitor the details of all the shares held by you in the demat account. This allows faster conversion of shares while trading online.
Documents required for demat account opening
1. Proof of income – Copy of Income Tax Return (ITR) deposit slip or salary slip or bank statement of last 6 months.
2. Proof of Identity- PAN or Aadhaar Card or Voter ID Card or Driving License or Passport.
3. Address Proof– Passport or Aadhaar Card or Ration Card or Driving License or Flat Maintenance Bill or Insurance Copy.
How to open Demat Account?
Demat accounts in our country are opened by two Depository Participant (DP) National Securities Depository Limited and Central Depository Services Limited. In which more than 500 depository agents work as DPs in common language. And the main work of all these is to open the demat account of the investors. You can open a Demat account by following these easy steps.
1) So first of all you have to select a DP with whom you want to open your demat account. After selecting the brokerage firm, you have to open a demat account on its official website.
2) When you go to that website to open a demat account, you have to fill the form carefully. And to complete its KYC process, you will need some documents for KYC.
3) After this process is completed, in-person verification will be done, for this you will have to go to the service provider’s office.
After this process is completed, you have to sign a term of agreement with the brokerage firm. Then after this your demat account gets opened and you will get demat number and a client id.
How Demat Account Works?
Trading through a Demat account is similar to the physical trading process. Apart from this, its price is Account Electronics. And stock availability is verified before final processing of the order.
Once the process is complete, the shares appear in your holdings statement when a shareholder wishes to sell the shares. So gives a delivery instruction notice with the details of the stock. The shares are then debited from the account and the equivalent cash value is credited to the trading account.
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So friends, we have told you through this post what is a demat account, how to open a demat account? 2023 We have provided all the information to you in Hindi language. So that you do not face any kind of problem if still you face any problem. So you can ask us by commenting below, we will definitely help you. If this post is useful for you, then all you have to do is share it with your friends as well as on social media platforms.