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Wants to invest in stock market, then you must have a Demat account for investing in the market. A Demat account is an abbreviation of dematerialized account, is a type of banking account which dematerialize paper-based physical stock shares. Dematerialization is the process of converting physical shares into electronic form and credited to investor’s demat account. It holds the securities like shares of a company, bonds, exchange-traded funds or mutual funds etc. in digital form.
Demat account is opened with Depository Participants (DP). Depositories Participants are the organizations that facilitate make contact between investors and depositories. In India there are two depositories NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) which are registered with SEBI (Securities and Exchange Board of India).One can easily and conveniently apply for demat account. As, in the market number of Depository Participants and Stock Brokers present from where you can open your Demat account for trading online.
Why you should have a demat account?
As it is difficult to hold the shares in physical forms because it involves a lot of paperwork, long process and risk of fake shares as well. So, for easy and convenient trading and investing, Demat account is must to trade in India’s stock exchanges. As demat account holds the certificates of financial instruments like shares, bonds, government securities, mutual funds etc. in the electronic form. It also eliminates the trouble of investors of holding physical bundles of share certificates and the risks, like the fear of damage, theft, fake share, duplication, signature mismatches, transfer hurdles and much more of paper certificate.
Benefits of opening Demat account
- No need to worry to hold the shares in physical form.
- No stamp duty on transfer is required i.e., need not to go the stock exchanges and buy physical stamp.
- Facility to buy and sell shares in lots of 1 in the electronic form.
- No need for a transfer deed
Documents required for opening demat account
- Proof of identity such as passport, voter Id card, driving license, PAN card.
- Address proof such as ration card, voter ID card, passport, bank passbook, Verified copies of Electricity bills (not more than two months old)/ Telephone bills (not more than two months old)/ Leave and License agreement.
- Passport size photograph
- Proof of bank account such as a Cancelled Cheque (with your name above the sign here section) is required of the bank you wish to link with your trading account, Bank statement of the respective bank.
- Applicant must have a PAN Card issued by the Government of India.
To know more about DA, click here https://www.applykaroo.com/demat-account