Demat Account

What Is A Demat Account?

A demat account allows the facility of holding securities and shares in one place, in an electronic form for an investor. In order to facilitate easy online trading for the users, shares are bought, held and then sold off from one account. This ensures easy investment for an individual in all the entities, like shares, government securities, exchange-traded funds, bonds and mutual funds.

What Are The Types Of Demat Account?

A demat account is a replacement for holding and trading in physical share certificates, which involved a lot of paperwork. As most of the transactions are online, an investor can trade conveniently.

There are two types of demat accounts:

Basic Services Demat Account (BSDA)

This account is for the investors whose holding value of investment certificate or securities does not exceed over a couple of lacs. Hence, the maintenance charge is low, annually.

Regular Demat Account

The only difference between this kind and BSDA is in terms of charges. For a regular demat account, the charges are more. However, they are worth for the convenience and services that it offers.

What Are The Benefits Of Opening A Demat Account?

Less Paperwork: all your investments are held into the account in an electronic form. This eliminates a major part of the documentation and reduces paperwork during the account opening process as well.

Low Risks: When dealing with physical copies, it can become very risky. They are, for instance, subject to physical damages, or misplacement. Opening a demat account will eliminate all these risks.

Less Cost: Trading in physical entities can entail higher transactional costs with extra expenses of handling charges and stamp duty. A demat account eliminates all these extra charges.

Instant Transactions: A demat account allows the faster transaction since it is electronic in nature. Because of this, the investor receives the credit in his account much quicker.

Why Open A Demat Account With 5Paisa?

5Paisa is a discount brokerage firm that offers demat services for a flat fee irrespective of the trade volume. This means that 5Paisa allows trading huge volumes at very low costs.

With 5Paisa.com’s discount brokerage model, you can trade in high volumes for a flat fee of Rs 10, and thus, save more than 90% on brokerage costs.

Moreover, opening a demat account with 5Paisa is a hassle-free process as your demat account would be a totally paperless account based on Aadhaar. This single account will help you manage all your investments in one place.

One can use this account to trade in stocks, futures & options (F&O), as well as currencies at a flat rate.

What All Documents Do You Need To Open A Demat Account?

For a hassle free account opening process, you need a couple of documents. Here’s a list of documents you need to keep handy:

  • PAN Card
  • Aadhar Card
  • Canceled Cheque
  • Income Proof (for Derivatives)

How To Open A Demat Account Online?

If you wish to open a demat account with 5Paisa.com, you’ll require just three documents (four, in case you wish to trade in derivatives).

Step 1

For a quick and easy account opening process, keep the following documents handy: PAN Card, Aadhaar Card, Cancelled Cheque, and Income Proof (for Derivatives Trading)

Step 2

Just visit our website at https://www.5paisa.com/open-demat-account and fill in the basic details like your name, email id, and mobile number to register.

You will be then redirected to a page where you enter your personal information such as your PAN details, Aadhaar details, your address, as well as your bank details to transfer funds back and forth.

Select the segment you wish to trade in before uploading your documents (Pan card, photo, canceled cheque, and income proof*).

Finally, with your Aadhaar card, you can e-sign the entire form. This paperless account opening process will get your demat account with 5Paisa.com started in no time.

What Are The Things You Should Know?

Depository Participants (DPs)

The financial institutions like banks and brokers who are empowered to offer demat account services are called Depository Participants. There are two kinds of depositories: CDSL and NSDL. This means that both these depositories hold details of your shareholding on your behalf, similar to banks that hold your money in different kinds of accounts.

Electronic Certificate

You own a portion of the company’s assets when you buy a share. There are three essential things that you need to start trading in the stock market: savings account in a bank, trading account and a demat account. To prove this ownership, you are entitled to receive a certificate.

No Minimum Balance

There is no minimum balance for you to hold a demat account. In fact, there is no minimum number of securities that you require to keep your account running.

Portfolio Holding

A demat account reflects all the stocks, bonds, mutual funds, exchange-traded funds, securities, and others, that you trade in too, in an electronic form. Every time you make a purchase, you demat account gets credited. And when you make the sale, the securities are removed from your account.

Unique Identity Of Transactions

When you register with a stockbroking firm, you receive a unique trading ID which is used to conduct transactions. When you trade, you are required to deposit money in your demat account to place order for a stock. Once your order is executed, the shares are forwarded to your demat account using the unique ID.