Demat Account

How To Open A Demat Account?

by Ankit Jaiswal on Basic Finance, Investing Basics
  • 6
  •  
  •  
  •  
  •  
  •  
  •  
    6
    Shares

DEMAT Account…Isn’t it, you have heard this term somewhere?

Also Read:  A Brief Distinction Between Bank Account, Trading Account and Demat Account

Let me tell you that it’s the first step to start with your investment in equities.

Stock market more popularly known as share market has seen a major technological shift from the way it initially started.

Know More:  Learn from scratch about Indian Stock Markets

The Bombay Stock Exchange was founded in 1875 with an open outcry system where traders would stand on the floor and shout prices of stocks for buying or selling.

Then, money would be exchanged for physical receipts of the shares called the certificate.

However, this led to a great amount of paperwork and the settlements of trade agreements took time due to the need to deliver the share certificates.

In 1996, dematerialization of shares was introduced which digitised the entire procedure.

Dematerialization is the process in which physical share certificates held by an investor are converted into an equivalent number of securities in electronic form and credited into the investor’s demat account.

Learn Stock markets from scratch by joining: NSE Academy Certified Capital Market Professional (E-NCCMP) course on Elearnmarkets.

Steps of Opening up a Demat Account:

Here’s a series of steps you can follow to open your demat account-

1. Collect an application form from any Depository Participant (DP) which is registered with SEBI and depository. You can log into SEBI website to look for nearest DP in your locality.

2. Submit the duly filled application form along with PAN card and proof of address like Passport, Voter ID card, Electricity bill, ration card, bank passbook, Adhaar, etc.

3. You’re required to enter into an agreement with the DP in a standardized format which specifies the detail of rights and duties of investors and DP.

4. Once you have signed the agreement and submitted the required documents, your DP will open your demat account and provide you 16 digit demat account number. The investments made in equities will be credited to this account and it will be debited (reduced) once you sell your securities.

Conclusion:

An individual may have multiple demat accounts if he wants to.

Moreover, there is no compulsion to open DP account with your stockbroker.

Please make a note that you will be charged with annual maintenance fees for the maintenance of your account.

So if you are willing to invest in equities and enjoy the benefits of compounding by investing for long term, please go and open a demat account today.

Take care and keep learning!!

Disclaimer

Elearnmarkets.com wants to remind you that all our content is created solely for the purpose of education. No strategy, stock, commodity, fund or any other security discussed here is any way a recommendation for trading or investing. Elearnmarkets.com will not be any way responsible for trading losses incurred by any individual or entity for trading with real money. Please take advise of certified financial advisers before trading or investing.

Ad

3 comments

  • Ankit Jaiswal, this is an excellent blog you have shared regarding opening of demat accounts. Many people often have queries regarding the opening of demat accounts and they really do not know where to look for information or whom to ask. Thanks for sharing this blog to enlighten such people.

  • Ankit Jaiswal, firstly thanks a lot for sharing this blog. There are many people who have a query as to how to open a demat account and how to start trading initially. However, they are not assisted in any way and their queries most often remain unsolved. This blog you have shared is sure to help such people with their queries.

Speak Your Mind

*