May 25, 2024

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5 Easy Steps On How To Open Demat account

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Demat account
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Before we understand the steps on how to open a demat account, let’s first know a little bit about the connection between investors & the stock market. 

Stock market & Investors

  • Stock markets are essential for investors as it offers investors with the chance to gain a profit from their investments
  • It allows portfolio diversification and allows access to liquidity. It also gains from transparency and offers a range in investment strategy.
  • If you invest into the Stock Market, you will be able to achieve your financial goals, no matter if it will be saving money for retirement or financing the education of a child or boosting their wealth.
  • Through investing in stocks, investors could gain from the economic growth as well as specific companies.
  • The stock market offers investors the capability to purchase and sell stock quickly, which makes it an extremely liquid market. 

In the end, the stock market is an essential part of the global economy, offering an opportunity for companies to raise capital as well as investors to earn potential returns on their investment.

Vital Function of Stock Market

  • The stock market plays a crucial role in the economy by enabling businesses it helps to raise capital and providing you as investor with the opportunities to invest through various instruments, such as stocks, intraday trading, and futures and options
  • It is an indicator of economic performance, aids in price discovery and could result in job creation.
  • It plays a crucial function in the economy by helping to facilitate an increase in capital flow as well as stimulating growth in the economy.
  • It is also important to know that the stock market can provide investors with the capability to purchase and sell stocks quickly, which makes it an extremely liquid market.
  • In the end, the stock market is an essential part of the world economy, providing the opportunity for businesses to raise capital, and investors to earn potential returns from their investments.

Opening Your Demat Account

Starting in just a few steps from anywhere, you can start your investment by simply opening a demat account, but first  choose a broker such as Kotak Securities which provides a seamless app for trading along with smart features for online trading.

How to open demat account in 5 easy steps online:

  1. As you have selected your broker, now you need  to open a demat and trading account from the choice of your trading platform.
  2. You need to enter your email and mobile number for registering.
  3. After that you will  receive an OTP for authorisation.
  4. As you enter the OTP you will also be required to enter some basic details, along with the digital copy of your Aadhaar Card and PAN card.
  5. You also need to connect your Digilocker account through your Aadhaar Card.  After that the verification process will happen, and within two working days you will receive your demat account credentials on your registered email.

Advantage you Get from Demat Account:

Faster Trade: With a demat account, you can easily access your securities anytime, anywhere, and make faster trading transactions through your online or mobile trading platforms.

Low charges: A demat account can be cost-friendly, as it eliminates the need for stamp duty fees and other fees associated with physical share certificates. Additionally, online trading platforms may offer lower brokerage fees compared to traditional brokers.

Better liquidity: With a demat account, you can easily buy and sell securities, making it easier to take advantage of investment opportunities and increase liquidity.You can sell your holdings from your investment apps anywhere and anytime you want.

More benefits: Companies may provide benefits such as dividends and bonuses directly to your demat account, simplifying the process of receiving and reinvesting these benefits.

Track Your investments: Demat accounts also allow for real-time viewing of account balances, which can be helpful when making investment decisions. 

Charges related to Demat Account

  1. Opening fees for accounts: Certain DPs or brokerage firms might charge an initial fee when you open a brand new demat account.
  2. Your annual maintenance fees: Many DPs or brokerage companies have a fee for maintenance each year to ensure that your demat account is maintained. The fee is usually paid on a monthly basis.
  3. Transaction fee: The term “transaction fee” refers to the amount due for each transaction you make through your demat account for example, purchasing or selling of securities. The fee could be a set amount, or an amount proportional to value of the transaction.
  4. A Custodian fee: This fee is charged to ensure the protection and management of your investments in the account for demat.
  5. Dematerialization fee: This cost is payable when you convert shares in physical form into electronic.
  6. Rematerialization fees: This fee is due when you convert your electronic securities to physical shares.
  7. Pledge fee: When you are pledging your security as collateral to secure the purpose of obtaining a loan the pledge fee could be imposed.

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