A demat account is an account that holds shares in electronic form. It makes Share Market investing easy & paperless. Investors do not need to own physical share certificates.
A demat account is opened with a registered Depository Participant popularly known as DP. DP is the intermediary between investor and depository. India has two major depositories i.e. NSDL and CDSL.
You buy and sell shares through a trading account. When you purchase shares, they are held in a demat account. Then you transfer the money to the respective bank account.
How Does a Demat Account Work?
If someone wants to buy shares then he places the order through trading account. Settlement: Crediting of shares to linked demat account on settlement.
Shares are sold during settlement and debited to the demat account.
This digital process makes it easy for investors to check their holdings in one place. They can also see the account statements and the online transactions.
How to open a Demat account
- Choose a Registered DP
Choose a SEBI registered broker or Depository Participant (DP) Before you sign up, make sure to read up on the account fees, services, trading platform and customer support.
2. Keep your paperwork handy
Minimum KYC documents to open an account. These consist of:
- PAN card
- Proof of identity
- Proof of address
- Bank account details
- Mobile number
- Email address
Some even video verify you online through the process.
Go to the official website or app of the chosen DP. Upload the papers and complete the necessary information.
Full KYC & Verification Process. Read the terms and account details before form submission.
4. Link Your Accounts
Orders are placed for Share Market through the trading account. The bank account is used for depositing or withdrawing money. The eligible shares and securities are held in the demat account. If you link those accounts you will have a complete on-line investing setup.
Transfer the required amount from your bank account linked to your trading account.
Make sure you check your available balance before ordering.
Look up the security or listed company on the trading platform.
Choose quantity and kind of order. Check the details and approve the order.
Once the trade is executed, the shares you buy will appear in your demat account.
7. Check your holdings
Review holdings and transactions regularly. Account Statements, Contract Notes & Trade Alerts
By performing routine checks you can catch any transaction that you don’t recognize.
Demat & Trading Access through Bajaj Brokerage
Bajaj Brokerage gives you an option to open your Demat Account and Trading Account online.
On its platform, users can buy and sell shares, ETFs, IPOs, bonds and equity derivatives, subject to relevant rules and eligibility.
The eligible securities are held in the demat account and the linked trading account is used to place the orders. This arrangement can be useful for the investors who want to get the digital access to the Share Market from a single platform.
Investors should verify the current charges, terms, risks and service conditions before opening an account.
How to Secure Demat Account
Online access needs to be managed carefully.
Use a strong password and any security features available to you. Never share your Password, PIN, OTP or login credentials with anybody.
Use only the official website or app of the Broker or DP. Do not click on any account links sent by unknown senders.
Check SMS & email alerts after each transaction. These alerts can help you keep an eye on activity on the account.
Please keep your mobile number & email address updated. In addition, bank and nomination details should be verified if necessary.
If there is any unknown transaction , please contact DP or broker through their official support channel .
Conclusion
Demat account is a very important account for investing in the online Share Market. It is electronic share ownership. It has a trading account and bank account.
The process involves selecting a registered DP, KYC, linking accounts, depositing funds and executing trades.
Investors should also verify statements and safeguard their login credentials. Demat and trading can be accessed digitally through digital platforms like Bajaj Brokerage. Please read important account fees, terms and investment risks before you invest.