Simple Steps You Can Follow To Open Your Demat Account
The first step you have to take if you want to become an investor is to open a Demat account. You may have heard of such an account before, but do not know how to go about opening one. Nonetheless, your education starts with knowing a bit about what a Demat account is and how it can be of advantage to you, the investor.
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A Background on Demat Accounts
To get a background about what a Demat account is and how it aids investors tremendously, a short history lesson is required. For starters, since the Bombay Stock Exchange first opened its doors in 1875, the share market, or the stock market, has undergone numerous changes. If you think about a ‘then and now’ story, in the old days, traders would be physically present on exchange floors and shout out buy or sell orders for trading transactions. Now, in this digital era, ‘physical presence’ and ‘paper’ is a thing of the past. Traders no longer have to be present at stock exchanges and shares and stocks, as well as other assets like bonds, debentures, etc, are not held in physical formats. Rather, they are held in digital formats in Demat accounts. In fact, brokerages let you open a free Demat account online.
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Simple Steps to Open a Demat Account
When activities to do with trading and investment could not be undertaken digitally, there was a lot of time and effort wasted in exercising trading activities. Furthermore, trades took almost two weeks to be settled. With online Demat accounts, trades are settled in a matter of two days. Furthermore, there was a ton of unnecessary paperwork involved, a large degree of room for human error. This has all been eliminated now, and whatever is your investment option, a Demat account linked to a trading account online makes your life easy. These are some simple steps to open one:
- You may visit the website of a bank or a brokerage and fill out a form. You may also physically visit a depository participant (DP) physically at a bank or a broking firm and physically fill out an application form.
- After you fill out the form, you may submit the same online, or at the branch of your DP. You will also need to submit your PAN and Aadhaar Cards too.
- To open a Demat account linked to a trading account to trade on the stock market, you have to sign an agreement with your DP. This is a standard contract to be signed, as regulated by SEBI or the Securities and Exchange Board of India. This agreement essentially includes details of duties and rights of your DP and investors.
- After you sign the agreement, you may submit it to your depository participant. Your Demat account will be in operation soon, after your DP hands over a sixteen-digit Demat account number to you.
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Effortless Demat Account Opening
Opening a Demat account with an eminent Indian brokerage like Motilal Oswal will have you on your way to investing wisely and easily. You can gain a world of knowledge with investment tips and strategies that encourage your investment goals to be achieved faster.
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