When it comes to demat account opening, the depository participant plays a very important role. And so, when choosing to open a demat account online, in addition to evaluating the account and its features, you will also have to analyze the DP and the services provided by them.
If you’re looking for some tips on how to choose the best demat account, then you’ve come to the right place. Here are a few of them.
1. Open your trading and demat account from the same service provider
Almost all stock broking firms in the Indian stock market are also depository participants. This gives them the ability to open both trading accounts and demat accounts under a single, simplified application process. By choosing to go with a DP that provides both trading and demat account opening services, you not only get to save time, but can also increase convenience. How, you ask? Let us explain.
When you open a trading and demat account from a single service provider, both of those accounts are invariably linked together. This gives the stockbroker access to your demat account and allows them to transfer shares out of your account on your behalf, each time you sell shares on the market. This cuts down on unnecessary time delays and the need to send across a physically signed copy of the debit instruction slip (DIS) every time you make a sale.
2. Check if the DP gives you the option to access your demat account through their platform
Now, when choosing a stockbroker cum depository participant, you also need to check if the service provider allows you to access both your trading and your demat account through a single portal. While most of them these days allow you to do that, there are certain providers who don’t.
In that case, you would have to manually log into your demat account using your credentials each and every time you need to check your account. This is a major inconvenience and a hassle. So, the next time you open a demat account online, ensure that you choose a DP that’s equipped well enough technologically to provide you with the ability to access both the accounts through a single sign-in.
3. Do some research on the DP’s service history
A great way to do this would be to read through the reviews of the service provider posted online by other fellow traders and investors. This is likely to give you a much better idea of the demat account and its features and the kind of services provided by the DP.
It is a good idea to stay far away from DPs with negative feedback and ones that indulge in malpractices, however minor they may be. Also, while you’re at it, check the typical timelines that the DP takes for generic processes such as dematerialization, rematerialization, pledging of shares, and others.
4. Check the costs and do a comparison
A demat account comes with various charges such as Annual Maintenance Charges (AMC), charges for physical and duplicate statements, and costs for dematerialization or rematerialization. And so, it is essential to check the costs to ensure that the DP charges you fairly and as per the industry standard.
You could also compare the costs with other similar service providers to get a better idea of where the DP stands. That said, cost savings shouldn’t always be at the top of your priority list. The DP also needs to be able to provide you with a high standard of service as well.
Conclusion
Now that you know how to choose the best demat account, get yourself one right away and start your investment journey! Demat account opening is a simple process that takes just a few minutes.
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