While entering the world of stocks and shares may seem like a risky venture to many individuals, there are several eager investors who do not mind the risks involved in stock investment. In fact, some love the excitement of the stock market and the anticipation of winning big. In previous times, stocks were seen as risky by several people, and now, they may be even more risky than ever, but investors and strategies have become smarter. This compels the smallest investor to try their hand in the world of equity, willing to risk a small amount at first, till experience teaches how to deal with stocks. With online channels open and easily accessible, many investors are now turning their attention to serious stock investments. As you may have heard by now, the demat account is a major part of your investment in securities, and is a way to store your securities, including stocks and bonds, in a secure electronic manner. Things in the stock investment markets have changed with changing times, and with technology at the backbone of processes to invest in the markets, holding a demat account paves the way for online stock investing with rewarding potential. Knowing about a Demat Account and how to know account details by account number is an important aspect of stock investment.
Demat Account or "dematerialized account" is compulsory in India if you want to hold any kind of financial securities in the equity or debt market; these include investments in stocks, mutual funds, derivatives, commodities, and currency markets among others. A Demat Account is an electronic account to hold any securities you buy in an electronic format. It is usually linked to your bank account and trading account to facilitate seamless operation when you buy and sell shares and stocks. As every aspect of trading is done online, all these accounts are accessible online. If you trade on the secondary markets, your Demat Account Number is as important as your primary bank account number or cell phone number. When you get a demat account number, when you open your demat account, you get a unique ID. As you may have guessed, to open a demat account, you have to have eligible documentation, like a PAN card. How to find a demat account number from a PAN card number becomes easy.
A Demat Account is usually opened with a brokerage firm such as a bank or trading house for example. These brokerage firms are participants in the depository system. Any bank or brokerage is essentially called a DP or a depository participant. These entities are authorised to open a demat account on an investor’s behalf and hold stocks in the account. A depository is where all your electronic investment records are stored. The two primary depositories in the Indian financial markets are the NSDL and the CDSL, the National Securities Depository Limited, and the Central Depository Services Limited, respectively. These are among the largest depositories in the world today.
Once you open a Demat account with a broker, you will receive a welcome letter from the depository. This letter will contain all information related to your account, including your Demat Account Number. There are two depository firms in India - CSDL and NSDL. Depending on the affiliation of your broker, you will receive a letter from either of these. Some brokers are affiliated with both depository firms. Generally speaking, it doesn’t matter which depository is affiliated with your broker. Once you have a Demat account, you can trade in the secondary markets.
In your welcome letter, your Demat Account Number will be listed as a 16-digit Beneficiary Owner ID (BO ID) in case of CSDL, such as 5687462156784568. If your account is opened with NSDL, your Demat Account Number will be a 14-digit ID followed by the letters ‘IN’, for example, IN45218695956564. When you do any transaction from your trading account, you can see your Demat Account Number listed in the transaction summary.
Your Demat Account Number is compulsory to be quoted in all transactions in the secondary markets in India. The purchase and sale of any securities from your trading account will be automatically reflected in your Demat Account. Demat Account Number basically does away with the need to hold share certificates and other securities in paper format. It reduces the risk associated with physical documents and significantly reduces the time needed to transfer shares from one person to another.
In case you have a Demat Account linked to your bank account, it is easy to find out about your Demat Account details using your Demat Account number. Typically, your Demat Account will be connected to your bank account, so via internet banking facilities, you can find out your Demat Account details too. You should keep your Demat Account number safe with you at all times.
The first thing you must do to know the details of your Demat Account is to log in to your internet banking portal. After this, you will see a section to view your account details. You may have to type in your password and your Demat Account number to view the details and download your Demat statements if you require. Along with your Demat Account number, you will also be required to enter your DP ID, and this is particular to the DP (your bank or brokerage) you have chosen to open a Demat Account with. Once you have access to your Demat Account, you can see your holdings and get statements for the same.
You should know that it is mandatory for your demat account to be linked with your PAN card, as required by the income tax authorities of India. Hence, your demat details are linked with your PAN number, and if you wish to find out your demat account number using your PAN card, you can conveniently do this through your DP. If you have online demat services, or an online broking account, you can fill in your PAN details and your demat account number will be displayed. Once you have linked your demat account to your PAN card (which you have to do to operate it), it is not hard to find any details about your account, like account numbers and securities stored in your demat account.
Your 16-digit Demat Account Number includes a Depository Participant ID and your customer number with your broker. This combination provides a unique Demat Account Number to each market participant. In the case of CDSL, the first 8 digits of your Demat Account Number are depository participant ID and the last 8 digits are your customer ID with the depository participant. The same goes for NSDL where ‘IN’, the 6 digits are depository participant ID and the rest of the numbers reflect your customer ID with a depository participant.
Demat Accounts are very important components of share market trading and investing. Without a Demat Account, it is not possible to open a trading account. Both are requisites to become participant traders and investors in the equities markets. Demat Accounts hold your securities safely for as long as you wish and with online access, all you require is your Demat Account number and other details tied to your Demat Account to avail stock investing opportunities. A Demat Account Number is as important as a bank account number when it comes to investing in India. You do not need to remember it; your brokerage firm associates your trading account with your Demat account and quotes it on your behalf whenever a financial transaction takes place. However, you should know how and where to find it.
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