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Sunday, September 30, 2018

All You Need To Know About A Demat Account

All You Need To Know About A Demat AccountA demat account is a bank account which serves the purpose of holding shares electronically. It is a requisite for people buying and selling shares regularly and dealing in stock exchange and stock markets. As per the Securities and Exchange Board of India (SEBI), shareholders and people dealing with more than 500 shares cant deal in the stock markets unless they have a demat account.

Why do you need a Demat account?

A demat account is the best way to hold shares, just the way a bank account is for holding money. The best demat account is free of scams such as mutilated share certificates, postal delays, and bogus shares.

Advantages of holding a Demat account

Holding a demat account for share trading and stock exchange has various benefits. Few of those benefits are as follow:

Public shares are credited automatically and faster if you have a demat account.

Since a demat account holds shares electronically, you can control your transactions through internet and email. Thus, its easier for you to manage shares in the long run.

In case of a financial emergency, holding shares electronically in a demat accountare easy to liquidate when required. You can sell shares during the transaction hours on working days from 10:00 am to 3:30 pm. The payments from selling the securities are received very fast.

In case you have to change your personal details in the demat account you hold, the process is easy and very simple. All you have to do is inform the depository participant of the change and your work is done. You can change your registered address, signature, Dividend Mandate, registration of power of attorney, transmission etc. via this process.

How do you open a Demat Account?

Share trading mainly happens through demat accounts. Thus, it is imperative that shareholders and people trading in the stock markets have a Demat account. Here are some points that one must keep in mind:


A person needs to be 18 years old to be eligible to open a demat account and deal in trades and shares.

Select a Depository Participant

Your depository participant can be a bank, a custodian, a broker or any financial institution that is ready to act as your agent. The best demat account usually has an effective depository agent who deals and transacts on behalf of the customer.

Application form

Filling out the application form for opening a demat account with a bank is just the beginning, but an important part of the process. Follow the given format and submit all the required documents with the application form.

Key points to remember while opening a demat account

It is essential to have a PAN card to have demat account

In case you dont use your demat account for a particular period of time, the bank has the right to close it.

Author Bio :- Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching on the best demat account and wishes to share her knowledge on the features of this type of account in this article.

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