want to open Demat Account ? Here is the key points you should know

Want to open a Demat account ? Here's The key points You should know

With the growth in the Indian economy market participants are also growing with a much faster pace than our economy. This creates a business opportunity for the brokers to open demat and trading account for the investors who want to invest money in the stock market.

Now a day’s mutual funds considered as a safe bet for investment but that doesn’t stopped investor to invest directly in the roaring bull market in the last 5 months. If you want to invest in the fastest growing economy of the world you can do so by ​opening demat account with the broker. Here is everything you need to know about demat account.

Different brokers offers varied services with their products, For investing one have an option to open demat with any of the brokers like Arihant Capital, ICICI Securities, HDFC Securities, Angel broking, Zerodha etc. These broking firms’ are either discount brokers or normal service broker. Discount brokers doesn’t have lot of product features on their platform they only provide ​online demat account​ and trading account where investor can trade in any of products offered by NSE/BSE like cash futures and option. Clients has to trade online but if he want to call and trade then these brokers charges amount for call and trade, while on the other hand normal service brokers offers varied service like IPO mutual fund, Insurance, PMS and research advisory services.

Opening Demat account For trading and investing you should have a Bank account, trading account and Demat account. In demat account you can only hold securities which you have purchased to hold and to be sold in future while in trading account you can buy and sell securities on a intraday basis trading account is also mandatory for trading in futures, option, gold and bonds There are two depository participants companies active in india who opens demat account of investors they are NSDL and CDSL. Investor has nothing to do with these depositories because they don’t have to contact these depositories while buying and selling the stock it is the broker who transact on behalf of clients with these participants.

Documents Required for Opening Demat Account Now a day’s all the brokers has facility of opening demat account online, you just have to upload the documents on the portal pay the account opening fees if applicable and you are done. Only thing is when are transacting on your demat account then you have to give POA (power of Attorney) to your broker. With POA broker will be allowed to transact on your behalf with the depositories. Following ​Documents are required to open a demat account Proof of Income 1.

Income Tax Return (ITR) Acknowledgement slip 2.

Certificate of Net Worth 3.

Salary Slip of the current month or Form​ 16.

4.

Last 6 Months Bank Statement Proof Of Identify 1. PAN card​ having a valid photograph 2. Aadhaar card / Voter ID card / driving license/ Passport.

3. Identity card issued by Central/State Government Proof of Address 1. Landline telephone bill, electricity/gas bill 2. ​Passport/Voters Identity Card/Ration Card/Driving License/ 3. Bank Passbook How it works Once your demat and trading account if opened you need to transfer funds from your bank account to your brokers account. You can now place buying and selling order in cash segment or in futures and option segment. You can also buy and sell difference products like IPO, Insurance, Mutual funds, PMS Etc if your account is with full service brokers. If you want to trade offline and want to take home the shares which you have purchased then you to sign the DIS (delivery instruction slip) and give it to your broker however if you have given POA then you are not suppose to sign DIS every time you transact on demat account your broker will do the same on your behalf.

Charges Broker charges account opening fees and annual maintenance fees in addition to the regular brokerage on buying and selling. Sometimes annual maintenance fees and account opening fees is waived off depending on the offers run by a broker. Brokerage charges differ from broker to broker standard charges of full service broker vary from 0.10 paise to 0.50 paise for delivery and 0.01 to 0.005 paise for intraday while discount broker charges vary from Rs.10 to Rs.30 per trade. Full service broker charges brokerage on a turnover while discount broker charges on each trade. One should select the plan which suits in his type of trading.