Published - Mon, 21 Feb 2022

What Is Demat Account? Meaning, Benefits & More!

What Is Demat Account? Meaning, Benefits & More!

We have all heard of bank savings accounts. It provides simple access to our cash while protecting them from theft and mismanagement. A Demat account serves the same purpose for investors. Nowadays, a Demat account is required for stock investing.

A Demat Account is basically a form of account that is widely used to store shares and assets in an electronic form. A Demat account is actually an abbreviation for a dematerialized account. The sole purpose of creating a Demat account is to keep your shares that have been purchased or dematerialized to be easily tradable online. Dematerialized means converting it from physical to electronic shares.

Depositories in India, namely the NSDL and CDSL have been offering free Demat account services. These services are taken forward by various intermediaries, other depository participants, or even stockbrokers.

Demat account prices vary depending on the amount that is maintained in one’s account, what kind of subscription they take, the legal terms and conditions with respect to their account, and between the stockbroker and the depositor.

So, what is meant by a Demat account?

A Demat Account, as said above, is also known as Dematerialised Account, which allows you to keep your shares and assets in a secured electronic format. The shares which are bought and kept in Demat account while trading online makes it very easy for consumers when trading.

It also consolidates an individual's interests in different stocks, bonds, securities, even the exchange-traded funds [ETFs] apart from the mutual funds.

Top Brokers Offering Free Demat Accounts | Open Free Demat in India

Demat facilitated the digitalization of the Indian stock trading industry and compelled SEBI to improve oversight.

Furthermore, by holding stocks in electronic format, the Demat account minimised the hazards of storage, theft, damage, and malpractices. NSE originally presented it in 1996. Initially, the account opening procedure was manual, and investors had to wait several days for it to be authorised. In this age and time, it takes lesser than 5 minutes to open your Demat account online.

The end-to-end digital method has aided in the spread of Demat, which has soared since the outbreak.

What exactly is dematerialization?

Dematerialization can be described as the process of transforming physical share certificates into electronic form. Guess what? It is actually easier to maintain it this way and then access it from anywhere on the globe.

If you are an investor who wants to trade online. Then you need to first create your Demat account with a Depository Participant (DP). The ultimate purpose of dematerialization is to ease the burden of having the requirement for investors to possess physical share certificates. It also allows very seamless tracking and monitoring of your holdings.

Previously, the process of issuing share certificates was time-consuming and complicated, which Demat has helped to revolutionise by speeding up the entire process and maintaining security certificates in digital format.

And once your Demat account is activated, you can convert all your paper certificates into a digital format. Make it happen by submitting all your physical securities with a Dematerialisation Request Form (DRF). Also, remember to deface each physical certificate with the words "Surrendered for Dematerialisation." When you return your share certificates, you will be sent an acknowledgment slip.

The Value of a Demat Account

A Demat account is a handy and technologically secure way to keep shares and assets. It does not allow any physical certificate theft, forgery, loss, and damage. You must know that you can transfer securities instantaneously by using a Demat account. Your shares are digitally transferred to your account after the deal is authorized. Furthermore, in cases of events such as stock bonuses, mergers, etc, the shares are credited to your account automatically.

Demat Account - A complete guide for demat account | Mangal Keshav

By login into the website, you may see your Demat account information regarding these actions. You may trade on the go using your smartphone or desktop computer. Thereby, you do not need to go to the stock exchange to deal. You also save money on transaction fees because there is no stamp duty involved in the transfer of shares. These advantages and benefits of a Demat account encourage investors to trade more frequently, boosting the possibility for significant profits.

Having a Demat account has made it comparatively very easy to manage equities. The Indian exchanges currently adhere to the T+2 day settlement cycle made possible by the Demat account.

The Advantages of a Demat Account

·       Transferring shares is simple and quick.

·       It allows for digitally secured storage of securities, which eliminates the risk of theft, forgery, loss, and damage to security certificates.

·       Trading actions may be easily tracked.

·       Allows for the addition of beneficiaries at any moment.

·       Bonus stock crediting, rights issues and split shares are all examples of automatic crediting.

If you're new to the world of stocks trading, you might not have heard of the pre-demat account period, when shares and securities were kept 'physically' in the form of certificates and sheets of paper. Consider this: millions of reams of paper are dispersed over hundreds of thousands of investors who are still holding on to their equities.

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How To Close Your Demat Account Online?
How To Close Your Demat Account Online?
When we finally decide to invest and trade, we often lookout for ways to execute the necessary process. One such is creating a Demat account. But with today’s fast-paced worldly affairs, we tend to forget and become lazy and keep postponing things till the last hour. And this might turn out to be an expensive error, especially in the world of the stock market!Fees and maintenance costs apply to Demat accounts. As a result, it is advised to cancel any of your inactive or zero balance Demat accounts immediately. Otherwise, we will lose money. As a result, knowing how to terminate a Demat account is critical.Demat or dematerialized accounts are an excellent option for most people to supplement their income. An online account is required for investors who trade in the financial markets.According to SEBI, the country has around 44.46 million Demat accounts. Basically, a Demat account is an electronic account where your shares and securities are stored. With the economy improving, more individuals are hoping to jump on the stock exchange bandwagon.Regardless matter how large the statistics are, SEBI has revealed that over 75% of accounts remain dormant. An idle Demat account is a financial drain that incurs yearly fees and maintenance expenses. As a result, it's a good idea to prevent any excessive expenses and terminate your Demat account.Know These Before Closing Your Demat AccountNote that, your Demat account cannot be simply canceled by submitting an online request for its closure. Be it through email or customer care.You are ought to submit an application in person that includes the hard copies of all the mandatory papers. But there is also a way out. If you are facing a time crunch, then pace up the entire process by downloading the closure form online.Follow these basic steps to know how to close Demat account online:·       Make sure that there are no shares in your account.·       Also check whether the account has a negative balance. ·       Check your account details by checking in to your account or by contacting your registered branch. Make a note of those details.·       Get your Account Closure form, fill in those required details, and submit it in person.Two Types of Demat Account Closure!Account closure: If there are no payments pending or being on hold in your account [you being the investor], then your request to close the Demat account online would be sent.It would be sent off to the relevant depository partner [also referred to as DP].Transfer and account closure: This method is a bit different. Suppose, you still have some securities pending and need to be transferred to another Demat account, then go for this method before actually shutting off your original Demat account. Close Your Demat Account OnlineFill up all the details in the Account Closure Form. If the Demat account is shared by more than one person, it is mandatory for all holders to sign it in the presence of a Depository Participant (DP) official. A brokerage business or a bank can serve as the DP.Make sure when completing the closure form, you do not forget to include the following information:·       Your ID and the DP ID KYC data, such as name and address, are in sync with your records.·       You also need to explain the reason why you want to close your Demat Account online.·       Finally, don’t forget to attach a self-attested identification proof copy which is verified by a bank employee.When moving pending holdings or shares from one Demat account to another, the following steps must be taken to cancel or delete a Demat account:·       There are two major national depositories in India, namely, NSDL and CDSL. If you are doing intra-depository transfers then an Intra DIS slip will be required, along with the 'Off-Market transfer option.·       Next, get an original Client Master List [CML] with proper logo, stamp, and signatures.·       After this, fill in the form with all the required data with the names of the shares that have to be transferred.·       Do not ever forget to mention their respective ISINs.·       The target client's ID, a 16-character code, should be specified too.·       Finally, submit your paperwork at the DP's office or simply mail it to their headquarters.·       For closure, a bank official must additionally check the self-attested Demat closure form. Final Thoughts Though Demat accounts cannot be entirely closed online, their process can be simplified by completing all the essential paperwork online. It is critical to ensure that there are no outstanding charges, fines, or shares in the account and that all of the information is correct. To avoid errors or lapses, the individual's details must be reviewed before transferring any shares or accounts.

Mon, 21 Feb 2022
What Is Demat Account? Meaning, Benefits & More!
What Is Demat Account? Meaning, Benefits & More!
We have all heard of bank savings accounts. It provides simple access to our cash while protecting them from theft and mismanagement. A Demat account serves the same purpose for investors. Nowadays, a Demat account is required for stock investing.A Demat Account is basically a form of account that is widely used to store shares and assets in an electronic form. A Demat account is actually an abbreviation for a dematerialized account. The sole purpose of creating a Demat account is to keep your shares that have been purchased or dematerialized to be easily tradable online. Dematerialized means converting it from physical to electronic shares.Depositories in India, namely the NSDL and CDSL have been offering free Demat account services. These services are taken forward by various intermediaries, other depository participants, or even stockbrokers.Demat account prices vary depending on the amount that is maintained in one’s account, what kind of subscription they take, the legal terms and conditions with respect to their account, and between the stockbroker and the depositor.So, what is meant by a Demat account?A Demat Account, as said above, is also known as Dematerialised Account, which allows you to keep your shares and assets in a secured electronic format. The shares which are bought and kept in Demat account while trading online makes it very easy for consumers when trading. It also consolidates an individual's interests in different stocks, bonds, securities, even the exchange-traded funds [ETFs] apart from the mutual funds. Demat facilitated the digitalization of the Indian stock trading industry and compelled SEBI to improve oversight.Furthermore, by holding stocks in electronic format, the Demat account minimised the hazards of storage, theft, damage, and malpractices. NSE originally presented it in 1996. Initially, the account opening procedure was manual, and investors had to wait several days for it to be authorised. In this age and time, it takes lesser than 5 minutes to open your Demat account online. The end-to-end digital method has aided in the spread of Demat, which has soared since the outbreak.What exactly is dematerialization?Dematerialization can be described as the process of transforming physical share certificates into electronic form. Guess what? It is actually easier to maintain it this way and then access it from anywhere on the globe. If you are an investor who wants to trade online. Then you need to first create your Demat account with a Depository Participant (DP). The ultimate purpose of dematerialization is to ease the burden of having the requirement for investors to possess physical share certificates. It also allows very seamless tracking and monitoring of your holdings.Previously, the process of issuing share certificates was time-consuming and complicated, which Demat has helped to revolutionise by speeding up the entire process and maintaining security certificates in digital format.And once your Demat account is activated, you can convert all your paper certificates into a digital format. Make it happen by submitting all your physical securities with a Dematerialisation Request Form (DRF). Also, remember to deface each physical certificate with the words "Surrendered for Dematerialisation." When you return your share certificates, you will be sent an acknowledgment slip.The Value of a Demat AccountA Demat account is a handy and technologically secure way to keep shares and assets. It does not allow any physical certificate theft, forgery, loss, and damage. You must know that you can transfer securities instantaneously by using a Demat account. Your shares are digitally transferred to your account after the deal is authorized. Furthermore, in cases of events such as stock bonuses, mergers, etc, the shares are credited to your account automatically.By login into the website, you may see your Demat account information regarding these actions. You may trade on the go using your smartphone or desktop computer. Thereby, you do not need to go to the stock exchange to deal. You also save money on transaction fees because there is no stamp duty involved in the transfer of shares. These advantages and benefits of a Demat account encourage investors to trade more frequently, boosting the possibility for significant profits.Having a Demat account has made it comparatively very easy to manage equities. The Indian exchanges currently adhere to the T+2 day settlement cycle made possible by the Demat account.The Advantages of a Demat Account·       Transferring shares is simple and quick.·       It allows for digitally secured storage of securities, which eliminates the risk of theft, forgery, loss, and damage to security certificates.·       Trading actions may be easily tracked.·       Allows for the addition of beneficiaries at any moment.·       Bonus stock crediting, rights issues and split shares are all examples of automatic crediting. If you're new to the world of stocks trading, you might not have heard of the pre-demat account period, when shares and securities were kept 'physically' in the form of certificates and sheets of paper. Consider this: millions of reams of paper are dispersed over hundreds of thousands of investors who are still holding on to their equities.

Mon, 21 Feb 2022
Know The Difference Between Investing And Trading In Stock Market!
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Fri, 18 Feb 2022

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