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Will New Demat Accounts Continue to Grow in India

05 Jan 2023

The word ‘Demat’ is something of a wonderment to several individuals in India, and if you are an active investor, the word can only spell advantages for you. ‘Demat’ is the common way of expressing the dematerialisation of shares, stocks, bonds and other securities, the representation of which was in paper (physical form) in previous times. Hence, now, instead of holding the shares you own of any given company, as physical or paper certificates, you can hold them in electronic form in a Demat account. 

 Advantages of a Demat Account

In the event you are planning to enter the world of investing in stocks, shares, commodities and other assets, you may wish to know why you should have a Demat account at all. Clearly, this is an electronic account and since every operation you conduct, whether in the world of finance or any other field, is online, Demat accounts are only touted to grow in future. If you know the advantages of having a Demat account, you will automatically know why their rise in popularity is foretold. Here are the advantages of holding a Demat account: 

  • Online Convenience - It is extremely easy and quick to open a Demat account online with a reputed broker like Motilal Oswal or a bank. With a process that just involves a few clicks and not much paperwork, your account is running in no time. 
  • Many Options - In case you have a bank account, you may open a Demat account there. Better still, if you wish to take advantage of a great brokerage firm, with benefits of trading and investment value-added services, you can open a free Demat account with any reliable broker. 
  • Dedicated Department - Banks and brokers have dedicated Demat departments and these entities are called depository participants or DPs, who have the authority to open Demat accounts on your behalf. 
  • Electronic Management - With a Demat account online, you can manage your trading and investment transactions seamlessly, as the securities you buy are placed for storage directly in your Demat account. Moreover, Demat accounts are linked to bank accounts with the highest standards of security in place, so transactions to buy or sell shares and stocks goes smoothly. 

Why New Demat Accounts Continue to Grow

Reports suggest that the amount of Demat accounts that have been opened in the present fiscal year stands at over 30% when compared to the previous fiscal year. This just tells you of the meteoric rise of Demat accounts in India. Why is this so? Well, in 2021, the stock market saw a huge leap forward, with more and more retail investors turning their attention to investment in equities. According to reports, new Demat accounts, just a little shy of 1.9 crore, were opened in the period of April 2021 to October 2021. It is no wonder then that Demat accounts are predicted to grow in the future as more and more investors are driven to invest in stocks. This may largely be due to the fact that the growth of investment in small savings accounts has reduced over the past few years. With bank interest rates low, people look elsewhere to gain fruitful returns. 

How to Open A Demat Account

It is simple to open a Demat account with any depository participant today. In case you already have a bank account, all you have to do is fill out an application and link a Demat account to your bank account. In case you want to open a fresh Demat account, here are the hassle-free steps: 

  1. On the Homepage of any bank or brokerage website you will see a tab that says ‘Demat Account’ or ‘Open a Free Demat Account’.
  2. An application form will be displayed once you click on the ‘Demat Account’ tab.
  3. You must fill in the required details. 
  4. Upload documentation required for KYC verification, such as your PAN and Aadhaar Cards, and other required paperwork.
  5. Submit your application form with documents.
  6. A representative from your bank or a brokerage may require you to physically verify documents at the institution's Demat department, or else you may get approval online itself. 
  7. Once your Demat account is opened, you will get a unique identification number for all further transactions. 

Ease and Convenience

At brokerages with good standing in India, such as Motilal Oswal, you can open a Demat account that is free of cost and avoid any extra charges. You should explore this website for all your investment needs and some sound advice.

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

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