Demat account is an electronic account wherein your shares and securities are held electronically. One no longer needs to share the physical certificates. Hence, the trading of stocks has now been much easier and quicker. One has to open demat account to buy and sell financial instruments and store those under one roof. In other words, it simplifies the management of your investments, and it’s a safer option because you can avoid misplacing physical certificates. Thus, a dematerialised account is an investment in the equity market, and one can avail of the facility provided by banks and other financial institutions.
Know the main steps to open a demat account
People willing to invest in the stock market should open a demat account. The following steps are key to opening a demat account and are described in detail below.
Researching and selection of broker
They help people purchase and sell securities. These issues will have to be decided based on certain factors, such as brokerage charges, services offered, and the broker’s reputation, among others. Further, other investors must search for what people say about the broker to understand whether this broker is credible or not. The trading platform must be convenient, and the broker must be able to provide good customer service.
Prepare documents needed
After choosing the broker you wish to proceed with, the second step will involve collecting all the documents required to open such an account. Generally, one would want identification proof, address proof, and a passport-sized photograph. Moreover, make sure updated documents showing your name and address are included. Some brokers may ask for additional documents like proof of income or a cancelled check from their bank.
Application form to be filled
The form requires your name, address, and contact details in general. Your investment objectives and trading preferences may be required on this form. Take as much time as you need to complete the form correctly. Just a single mistake delays the whole process of opening your account. Fill in the form and then review it again: double-check that all entries are correct. After verifying that all entries are correct, submit these with your documents.
Complete the KYC process
Once the application has been submitted, it is time for the Know Your Customer stage. This step is very important for identifying a person and is usually taken out for regulatory purposes. Further information may be needed from the broker, or the verification process may be needed, which requires physically visiting them or through a video call. This also includes being ready to provide information about your financial and investment experience.
Get your demat account details
Once the application and KYC are processed, the details are sent to a demat account. Your unique custody number is provided with details of accessing your account online. Many brokers give your login credentials to their trading platform, wherein you see your investments. You may transfer shares and funds to your demat account once your account details are received. Now, you’re all set to start your investment journey!
Final words
To sum up, a demat account has become a compulsion for every investor since it makes holding and dealing with securities easily. With the emergence of trading apps, investments can be managed anywhere in the comfort of your phone since users can check on their portfolios or execute trades on the go. Therefore, opening a demat account indicates making an intelligent move into the stock market for effective participation.
