HOW TO OPEN DEMAT ACCOUNT ONLINE - 7 STEP WISE PROCEDURE TO OPEN DEMAT

HOW TO OPEN DEMAT ACCOUNT ONLINE 7 STEP WISE PROCEDURE TO OPEN DEMAT

What is a Demat account and its importance?

The full form of the Demat account is a dematerialized account. It is an account to keep financial securities in electronic form. You can start a Demat account online.

There are multiple advantages of opening a Demat account. It becomes more convenient, easier and faster than having them in the outdated physical state. The investor does not need to hold material share certificates and the administering of holdings becomes simpler. Therefore, it becomes much safer too. When you engage in online trading, the shares are purchased and held in a Demat account. It makes dealing in securities simple for you. Moreover, these shorter settlements enhance the liquidity, and there is no stamp duty on the transfer of securities that are there in the Demat account.

Process of opening a Demat account online:

Opening a Demat account online is very easy. There is a simple procedure that has to be followed. The seven steps that you require to follow for opening a Demat account are as follows:

1. Contact the Depositary Participant (DP): A depository participant refers to anyone whom you find suitable to open a Demat account. It refers to any intermediary such as a bank, financial institution or a broker. Ideally, one must select after comparing the brokerage charges and leverage that is provided among these intermediaries. Requesting the DP to open a DMAT account can be done online. Filling the initial application is the first step in the procedure of opening a Demat account.

2. Submit the necessary papers: The filled opening application has to be submitted, along with some essential papers to open an account online. Crucial details such as your name, email-id and mobile number. The depository participant then contacts you regarding further information. Submit these documents online for verification.

3. Know the charges: It is essential to know the total amount of expenses that one needs to pay for opening the account. It would be best if you considered the yearly maintenance charges, the dematerialization and the rematerialization charges.

4. Sign the agreement: The next step is to sign a standardized contract with the depository participant. The contract mentions all the rules and regulations of the Demat account. It also includes the rights and duties of the investor and DP in intricate details. You must scrutinize them before signing the agreement. Moreover, if there are any queries, they must be clarified immediately. A photocopy of the contract is given to you as well for future reference.

5. Verification of papers: The DP or his staff members verify the papers that you have submitted. Once you clear this verification process, you can move to the next step.

6. Demat Account number and Client ID provided by the DP: After the verification process is over, the DP provides you with your Demat account number and customer ID. The trading of shares is done by this account.

7. Open the Demat account with the given specifications: You can then start trading securities through this Demat account.