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Is it possible that Your Demat Account to be hacked

A Demat account is used for the electronic storage of shares and is usually connected to a trading account. With both these accounts online, it's not surprising that questions about security arise. In fact, the first question that may pop into your head while opening a Demat account may be whether any fraudulent activity can take place. So, can a Demat account be hacked into? Afterall, if other kinds of accounts can be the brunt of dubious activities, so can a Demat account. It's worth finding out more about a Demat account and how safe it is for you to operate.

Can a Demat Account be Hacked?

The answer to the question of whether a Demat account can be hacked depends wholly on the brokerage you choose. In the investing world, there is a plethora of DPs or depository participants (brokers or banks), but you must make sure you find one whose reputation precedes itself and is reliable. You may not find that every broker is 100 percent safe, and some may put a priority on aspects other than security. Apart from this, a trading account which is invariably linked to a Demat account may pose some security challenges. When you trade with a Demat account online, there are certain things to consider so your wealth remains safe at all times.

Aspects of Safety

There are some aspects of opening a Demat account and holding one that relate to Demat account security. Specific processes and concepts of a Demat account may compromise security, and you should be aware of these to understand associated security issues. The following will shed some light on this:

The POA (Power of Attorney) - When you open a Demat account, the broker that you open it with, and you, the investor sign a document called a ‘power of attorney’. This is an agreement between you and your broker and gives the broker the authority to make sales of shares on your behalf. The aim of the POA is to make the complete process of transacting convenient. Nonetheless, when stockbrokers deal in unfair practices, they can make sales of shares without taking your consent. However, if you open a Demat account with a credible broker like Motilal Oswal, you can be assured of safe practices as the reputation of this prominent broker is something of a legend.

Online Fraud - When online platforms and services come with credentials for you to easily log in with, there is always the chance of online fraud. You will likely open a Demat account with your password and username, but if someone else gets their hands on these, you may find that your stocks are gone. This is confidential information, and it is always advisable to memorise passwords and usernames, not write them down or have them stored in a device which may be stolen (like a smartphone). It's also a good idea to change your usernames and passwords on a regular basis. Furthermore, you may sign up for the facilities of receiving SMS messages and email alerts. This way, your DP will contact you whenever a transaction is made and you can monitor dubious ones.

Trade Safely

Trusted brokers like Motilal Oswal are constantly trying to make their platforms safe for investors to trade and invest. When you open a Demat account that is connected to a trading account, your trades are secured and you get platforms with abundant security so that your investments are worry-free.