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A demat account allows investors to hold their shares in an electronic form. It is a replacement for holding and trading in physical share certificates, which involved a lot of paperwork. As most of the transactions are now online, an investor can trade conveniently with demat account.
Stocks in demat account remains in dematerialized form, where all your stocks are converted from physical to electronic form to increase accessibility. Apart from shares, the demat account can also hold bonds, ETFs, mutual funds, gold bonds, and other similar assets with a unique ISIN number.
Less PaperworkAll your investments are held in an electronic form, which eliminates a major part of documentation and reduces paperwork.
Safe and SecureA demat account eliminates all the risks associated in dealing with physical shares like physical damage or misplacement. Opening a demat account will eliminate all these risks.
Reduces CostTrading 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 TransactionsBeing in the electronic form, a demat account allows faster transaction, resulting in quick credit for investors.
A Demat Account is used to transfer share holdings of an investor. Being in electronic format, the process of transfer of securities is much faster and less burdensome. Once necessary instructions are given to the depository participant, you can easily transfer the shares.
Among the various benefits of demat account, having multiple access is one of the key advantages. A demat account can be accessed easily via multiple platforms – computer, smartphone or any other handheld device. You can easily invest, trade and monitor your portfolio across any of the access points, all you need is internet connectivity.
With your online demat account, you can easily convert your security in electronic or physical format. All you need to do is give necessary instructions to your depository participant (DP) for dematerialisation or rematerialization. Dematerialization is the process to get the physical share certificates converted into electronic form, while rematerialization converts electronic securities back to the physical form.
Holding an demat account, makes it easier and simpler for you to avail the benefits arising out of corporate actions. Whenever a company provides dividends, interest or refunds to its investors, all the demat account holders get access to these benefits automatically in their bank account. In addition, actions related to equity shares like stock split, right shares or bonus issue is updated in the shareholder’s demat account.
In order to avoid any unexpected debit or credit in your Demat Account, you have the option to freeze your accounts for a specific duration as per your requirement.
An online demat account in a way is like your bank account. The only difference is that the
bank account holds cash and the demat account holds shares and other securities.
When you buy shares, the Depository Participant credits your online demat account with the shares and these are reflected in your statement of holdings. If you are trading through an internet based platform, you can view your holdings online.
When you sell the shares, you need to give your broker an instruction. Your account is debited with the shares and you are then paid the money for the shares sold. If you are trading through the internet, the account will automatically reflect a debit of the shares while the amount is credited to your bank account.
There are two Depositories in India – the National Securities Depositories Limited (NSDL) and the Central Depository Services Limited (CDSL), through whom the shares are held by the various depository participants.
Regular Demat Account
A regular demat account is used by investors and traders who reside in India. Alternately SEBI has also introduced an account type called the Basic Services Demat Account (BSDA) for investors whose holding value does not exceed Rs 2 lakh. Hence, the maintenance charge is low, annually.
Repatriable Demat Account
A demat account is meant for non-resident Indians (NRIs) under which funds can be transferred abroad. This type of demat account requires an NRE bank account associated with it.
Non-Repatriable Demat Account
A demat account used by NRIs under which funds cannot be transferred abroad. This type of demat account requires an NRO bank account associated with it.
Fill in your Personal Details
For opening a demat account, you need to fill in your personal details like PAN No. and Date of Birth. With these inputs, we will prefill all your details so you can just verify it.
Enter your Bank details
You need to share your Bank Account Number and IFSC Code. We ensure that all your information will be saved securely with us.
Upload your documents
Our account opening process is completely paperless, so you just have to upload a picture of your Pan Card and Address proof.
e-Sign your form
Review your complete form carefully and e-sign it digitally using Aadhaar. Once all your details are verified by our team, your account will be open in no time and you can enjoy the benefits of demat account.
For a hassle-free account opening process, you need few documents. Here’s a list of
documents you need to keep handy:
A demat or dematerialized account holds shares in electronic form. A demat account allows you to buy shares and store them safely. It is similar to a bank account. When you purchase shares, it will be credited to your demat account and similarly when you sell, it will be debited from your account.
A demat account can be used to hold a variety of investments including shares, ETFs, mutual funds, bonds, and government securities. Any shares you are holding in paper form can also be dematerialized in electronic form in your demat account.
For individuals, we charge Rs. 650 + GST as processing charges for All in one Account. All in One account processing fee consists for all the segments you trade with 5paisa. There are no segment wise charges applicable. For non-individual, we charge account opening fees of Rs. 1,025 + GST.
Note: Currently, there are no charges for A/c opening. A/c opening is absolutely free.
Yes, you can have multiple demat accounts but not with the same broker/DP. However, even if you open multiple demat accounts, you will have to keep track of different accounts, login to separate trading platforms, and assess separate P&L statements while filing your taxes.
You can open a demat account in the name of a single holder account or a joint holder account. A demat account can have maximum three account holders - one main holder and two joint holders.
Demat Account is mandatory for trading in the stock market. It is not required for Mutual Fund investments of any kind including SIP.
POA allows seamless movement of shares from your DP account for the purpose specifically mentioned in POA. For example, to meet exchange pay-in obligation, margin requirement, apply in buyback or rights issue, among others.
While POA is not mandatory, it is advisable to provide POA for seamless transaction processing for the purpose specifically mentioned in POA.
Trading account and demat account are two distinct accounts. While demat account retains shares and securities, trading account facilitates their sale and purchase. To complete the purchase or sale of securities, you need to have both demat and trading account. Hence, it is advisable to link your trading account to your Demat account to avoid the process of verification each time you buy or sell stocks and simplify your investments.
Yes, you can. Apart from shares, the demat account can also hold bonds, ETFs, mutual funds, gold bonds, and other similar assets with a unique ISIN number.