When a person starts trading, a secure account is a must for storing all the share certificates, trade securities, and other documents. Traders need to know which account to choose as these items need to be kept safe, secured, and confidential. If any of these documents get misplaced, it is difficult to retrieve. Physical materials are tough to maintain and are prone to get lost or get damaged. Hence, people prefer electronic modes of storage.
A Demat account is provided by the stockbroker to store stocks and securities electronically to avoid physical control or damage. You can register with NSDL (National Securities Depository Ltd) or CDSL (Central Depository Services India Ltd), which are the two well-known depositories that exist in India. How bank accounts store cash and valuables; similarly, these accounts hold shares/stocks in electronic form. The shares bought or sold are credited or deducted from this account. They can be available on major stock exchanges of India like BSE and NSE.
Following is the process of how to open Demat account:
The documents required for opening this account are:
- Passport size photos
- Residence Proof – Any one of Photo Ration Card / Photo Driving License with DOB / Passport copy / Electricity bill / Telephone bill
- Identity Proof – Any one of Passport copy / Photo Driving License with DOB / Voters ID Card / PAN Card / Photo / Ration Card / PAN card
The account opening form is available with the Depository Participant (DP) that has should get filled accurately. Some pre-defined agreements get signed between the client and the DP that hold their rights, obligations, and other relevant information.
2. Choosing a DP:
The DP acts as an intermediate between the depository and the traders that get registered with the SEBI. It connects with clients through agents. They include brokers, online investment platforms or even banks.
For opening the best Demat account for trading, every applicant must submit documents which are verified by a person associated with the DP for accuracy.
4. Identity number:
During the application procedure, the account holder will receive a Beneficiary Owner Identity (BOID) – a unique account number for conducting future transactions and account operation.
Some of the well-known accounts include:
- Angel Broking
- ICICI Direct
- Kotak Securities
- HDFC Securities
- SBI Securities
The charges for opening the best Demat account include:
- Account opening charges
- Annual Maintenance Charges (AMC)
- Custodian charges
- Transaction charges
Rakesh is a finance advisor with 12-plus years if experience in the investment industry. He loves researching and writing on different investment topics. In this article, he has written on Demat Account and the process to open the best ones.