Demat accounts, according to all the latest reports, are opening at an exponential rate. The reason for this is because more and more individuals are veering towards equities for their investment goals. In addition to this, many novice traders have risen to meet the challenge of trading vociferously. Hence, a demand for the Demat account has recently seen new heights, from just a few years ago. Brokerages and banks are certainly promoting the trend of this new demand, helping many investors to reap the benefits of investment in equities and other assets that require Demat accounts to be opened. However, if you are a new investor, you may be looking for some crucial tips so that you can make the most of your Demat account. You can find fifteen top tips in the following sections.
- Open a Demat Account - Of course, this may not be so much as a tip as a good suggestion, but the very first thing to do as an investor is to open a Demat account. However simple this may seem, it will benefit you if you find a reputed broker to open a Demat account. It is better to choose a ‘full-service’ broker as compared to a ‘discount broker’, as you get more advantages.
- Invest in an IPO - The selection of investment instruments that you wish to allocate your funds to is entirely up to you and your distinctive financial goals. However, if you are considering an upcoming IPO investment, you would be better off with a Demat account with a full-service broker.
- 3-In-One Account - If you wish to invest in stock markets, you should ideally have a bank account, a Demat account and a trading account, all linked to each other. A Demat account simply stores your shares, but the other accounts facilitate transactions, like purchases and sales of securities.
- Online Accounts - You can open a Demat account online with convenience in a few simple steps. However, you will have to sign an agreement with your broker, the Power of Attorney, in physical form.
- Seamless Transactions - By holding accounts that are linked together, your transactions can be seamless and quick. Hence, you must find a trustworthy broker and link your accounts with a single brokerage.
- Depository Participants - Your broker is called a depository participant (DP). A broker has the authority to open a Demat account on your behalf and stock your shares. A DP works under the rules and regulations of the two major depositories in India, the NSDL and the CDSL.
- One Broker, Single Function - When you have all your accounts linked with one brokerage, you don’t have to fill and sign Delivery Instruction Slips for each transaction, which can easily be done online.
- Brokerage Fees - Make sure that you check brokerage fees when you open your Demat account, and whether annual charges are high or reasonable.
- Single-Time Expenses - If you do your research well, you will discover that some brokers waive annual charges for maintaining Demat accounts and charge you for transactions as ‘one-time’ payments.
- Flat Fees - With Demat account opening, you forge the first step of an investment relationship with your broker. It is worth choosing a broker that charges you flat fees for whatever transactions you may undertake. This takes the worry out of each transaction you may go through.
- Consider Gains - When you open a Demat account, use it well and if you are investing in equities, think of long-term investment for good returns.
- Informed Decisions - Take informed decisions while selecting equities to invest and store in your Demat account.
- Select an Advanced Brokerage - When you wish to open a Demat account, don’t rush with the first half-decent brokerage you come across. Rather, sit back and do your research to find a firm which has the right combination of technology and user-friendliness in terms of its operation and platform. This will make your life easy and you will not only be able to invest and trade easily, but operate your Demat account flexibly too.
- Be in Control - Although choosing a good broker that makes your life easy is a great way to begin your investment journey, you should see that you are always in control of your transactions, and are free to monitor your Demat transactions flexibly.
- Be Secure - A proficient broker will keep your transactions and your Demat account secure at all times. Read about security measures and pick a broker wisely.
Open a Demat Account Today
If you want to be more than sure that you are going along with a reputed broker, you can open a Demat account with Motilal Oswal today. With this full-service brokerage, you get many benefits when you invest, and advice based on years of expertise.
Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account | Upcoming IPO | LIC IPO