6 Things To Consider Before Opening A Demat Account


It is a no brainer now that you need to learn how to open Demat account if you want to trade in shares. Demat account is a unique trading account that all share traders have to open before entering the share market. 

It helps in storing and managing the shares electronically. Not just shares, you can use your Demat account to hold other securities as well, like debt securities, bonds, debentures, equities, mutual funds and derivatives, etc. 

There are plenty of things that you need to consider regarding Demat accounts. In this article, we will discuss 6 things you need to know before opening a Demat account. 

Why is Opening Demat Account Important?

You cannot buy or sell shares and securities without opening a Demat account. A trader must have a functional Demat account with a depository participant to be eligible to trade in shares and securities. It also helps in keeping the shares and securities safe from all the risks. 

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How To Open A Demat Account?

You need to learn how to open a Demat account to start dealing in shares. The process is pretty simple, you have to approach a SEBI registered broker to get your account started. Fill in a quick form and attach all the essential documents. You will also have to give an in-person verification to prove your identity. 

Type of Brokerage

Majorly there are two types of brokerage firms that are currently operating: full-service brokers and discount brokers. A discount broker will help you in derivative and equity trading service, the full-service broker will cover everything for you. Additionally, they can offer you portfolio management as well. Hence, it is important to choose your brokerage wisely according to your trading needs. 

Brokerage Fees And Charges

Another important thing that you cannot ignore is the brokerage charges and fees. All the brokers have their specific Demat account charges and fees that you need to pay for opening a Demat account. Along with the account opening, you will also need to provide maintenance fee annually for maintaining your Demat account properly.

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Simple and Fast Procedure

Another trait of a reliable depository participant is a simple and fast process. According to SEBI guidelines, opening a Demat account is a fast and straightforward process, and all the depository participants must follow that. Make sure your broker has e-KYC, and conduct verification and documentation processes online. 

The self-identification process should also be conducted according to the SEBI guidelines via online interactions. The Expertise of your broker depends upon how fast they can open your account. 

Seamless Operation

When you have a Demat account, your trading in equities and derivatives must be seamless. A 2-in-1 Demat account is best for trading in equities and derivatives. Look out for brokers that can provide you with a 2-in-1 Demat account. It will allow you to store, monitor, invest and track your equities and derivatives. 

Demat is an unavoidable part of share trading today. It is imperative to understand its benefits and relish the benefits of stress-free and seamless trading.