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DEMAT Account

Account that provides the facility of holding shares and securities in electronic format is called DEMAT account. Account holder can buy and order their share through this account. DEMAT Account stores information about mutual funds, trading exchange information, bonds, government securities funds and other useful records. Account holder gets the authority to access and handle these facilities from one platform.

Demat account is a short form of dematerialized account that allows to account holders to be the owner of the shares and securities in electronic format. Dematerialization is the process of converting share certificates in electronic format which makes it easy and convenient for the accountholder to keep and maintain the shares from anywhere in the world.

In the electronic trading system, the shares are brought and held in a demat account that facilitates convenience of easy trading for the shareholders. An account holds all the investment made by an individual in shares, exchange traded funds, government securities, bonds, and mutual funds, all at one place.

The online trading services are provided by depositories such as NSDL and CDSL through the network of intermediaries, depository participant, and stock brokers. The charges vary according to the volume held in the account, subscription type, and the terms and conditions laid by the stock broker and the depository.

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In simple words, demat account is more than similar to a saving or current account, the only difference is that the account holds securities such as shares, debentures, mutual funds, exchange traded funds, bonds, and government securities, instead of holding cash. The account acts like an alternative for holding securities in the form of physical certificates.

It is mandatory for the company enrolled in a stock exchange to offer the securities in both physical and dematerialized format; where, physical securities denote the original certificate, whereas, dematerialization converts the physical shares in the digital format along with the entire information about the shares of a company owned by an individual.

Therefore, to buy or sell the securities in Indian Stock Market, an individual is required to open a demat account. Such account reduces the risk of share certificate fraudulent, postal delays, and counterfeit shares because the online mode of holding the securities is quite safe and convenient.

Types of DEMAT Account

If you are investor then DEMAT account is mandatory for you. It offers different types of benefits to customers. There are two main type of DEMAT account

Repatriable Demat Account

Fund or Amount that can be transferred in other countries is called repatriable amount and account that offer this facility is known as repatriable demat account. As Repatriable funds can be taken abroad, they need to be kept in an individual bank account, i.e. NRE bank account. Typically, the funds brought in and from foreign currency are kept in such n account. Investments made from such an account can be repatriated and thus, are maintained in a Repatriable demat account.

Non-Repatriable Demat Account

Funds deposited in different bank but cannot be transferred to other countries refer as Non-Residential Ordinary and Account that offer this type of facility is known as Non- Repatriable demat account.As funds cannot be taken abroad, they need to be kept in a separate bank account, i.e. NRO bank account. Thus, investments made from such funds cannot be repatriated and so, are maintained in an individual non-Repatriable demat account. Once the funds are transferred from NRE to NRO bank account, the repatriability of the account gets lost and cannot be converted to NRE account.

Types of DEMAT Account

Demat account offers most secured way to handle and mange your account related securities and allow instant transaction and approval facility easily. Account holder will get protection from online trapping, financial trapping, Damage of physical certificate, forgery, thefts and several other possible threats. You will get facility to track and access your account from anywhere as per your interest and need. User will also get freedom from paying stamp charges and custom charges.

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Benefits of DEMAT Account

Authorize banks offers following facility for account holder 1. Benefits in online transaction. 2. Account can be use for debit and equity investment. 3. One of best secure transaction facility provider. 4. In case of Utilities transfer Zero stamp charges. 5. Least use of paper work. 6. Easy transaction facility. 7. Account holder will get flexibility in account accessing; you can access your account anytime from anywhere. 8. Much integrated funds and records sharing Facility.

Disadvantage of DEMAT Account

Authorize banks offers following facility for account holder 1. Sometimes dematerialized securities create complication. 2. Sometimes fund approval and other process may consume too much time that irritate account holder. 3. Procedure to handle DEMAT account is quite complicated. If you are successful account holder then you can close your account. 4. To boost your business you have to follow some important protocol otherwise you will not boost in trading.

Facilities offered in a demat account

Transfer of shares

A demat account can also be used to transfer share holdings of an investor. This can be done through a Delivery Instruction Slip (DIS) in order to conduct share trading. An investor needs to provide all the relevant details in this slip for hassle-free and convenient execution of a transaction.

Loan facility

If an individual holds securities in a demat account, then he/she is liable to get a variety of loan offers from several mainstream banks and financial institutions. The securities can be pledged against the loan as collateral or mortgage to the lender.

Dematerialization and Rematerialisation

Gone are the days when conversion of securities was actually a challenging task. With a demat account, the conversion seems to be quite an easier think to do. Investors are required to give necessary instructions to their depository participant (DP) for dematerialization of securities, where physical share certificates are converted into electronic form. Conversely, the same goes for converting electronic securities into the physical state.

Multiple access options

Owing to electronic format, an account can be accessed through numerous access options including computer and smartphone. An accountholder can conduct trading operations such as investing, trading, and monitoring through multiple access choices. This gives the investor the freedom to trade at their own comfort and convenience.

Freezing demat account

Account holders have got the choice to freeze their account for a particular duration. For instance, there's a wedding in family and they won't be able to pay attention to their account, so they have an option to freeze the account for a week. This is done to avoid unexpected loss into the demat account. Though to avail the option, an investor needs to meet the minimum security holding criteria.

Important Document to Open DEMAT Account

Proof of Identity Proof of Address Other Documents
Aadhar Card Aadhar Card ITR Statement
PAN Card Ration Card Bank Statement
Voter's Id Rental Agreement Applicants Cheque Book
Passport Electricity Bill Two Passport Size Photograph
Driving License Telephone Bill -

A Copy of PAN Card As per the instruction of the National Securities Depository Limited (NSDL), it is mandatory to submit a copy of PAN card while opening demat account, in order to avoid the existence any fake trading account.

Individual Verification To open a demat account, an applicant is also required to submit the copy of documents including Voter ID, passport, saving account details, and hardcopy of an application. However, the NRIs and foreign nationals are provided the flexibility to escape the session. Thus, they can send all the mandatory documents such as duly filled account opening form, identity, and residential proof via post. The documents need to be duly attested either by the consulate general of the country or by the Indian embassy.

Fees And Charges Incurred

If you are investor then DEMAT account is mandatory for you. It offers different types of benefits to customers. There are two main type of DEMAT account

Account Opening Fee

The value of the fee varies according to the depository participant. There are certain groups who don't charge any fees for opening a demat account such as HDFC Bank, Axis bank, and ICICI. On the other hand, some DPs do charge an account opening fee. Also, the stock holding corporation allows the accountholder to hold the account for longer by paying a lifetime fee. The fee is wholly refundable.

Transaction Fee

A nominal transaction fee is charged every month for all debit and credit transactions held during a month. However, the value of the fee depends on the type of transaction, i.e., selling or buying of shares. While some depository participants may charge only for debit transactions, others might charge for credit transactions as well. In addition, service tax is also charged along with the transaction fee.

Conversion Charges

The depository participant (DP) can charge for the conversion of shares for every conversion from electronic to physical mode and vice versa.

Maintenance Fee

A management fee is charged in monthly or annual intervals.

Steps to Open Demat Account at Applykaroo

Step 1. Go to url https://www.applykaroo.com/demat-accountand following window will appear on screen. Step 2. Enter your city name, monthly income and your profession in search box. Then, click on SEARCH button and following window will appear on screen. Step 3. List of all banks will appear on screen as per your eligibility. Step 4. Then, user can select the best DEMAT account as per his interest and now click on the APPLY NOW button.

Step 5. Now fill the application and proceed for further processing.

Step 6. After activation of your account you will be able to enhance your business and trading.

How Does A Demat Account Works?

It is somewhat similar to physical trading; the only difference is that it works on electronic platform. The trading begins with the orders placed through an online trading account. Thus, it is mandatory to link both demat and trading account. The exchange security board will process the order once it is placed and the owner will get the entire details along with the current market price and the availability of the shares.

Also, when a shareholder decides to sell the shares, the instructional note is sent to the account holder with details of the stock. On finalizing the process, the shares are debited and the equivalent cash value, against the shares sold, is credited to the trading account.

This online trading system was first introduced in the year 1996 under the Depository Act which made the dealing process of securities quite easy, reliable, and convenient. The system reduced the involvement of paperwork to almost zero. The system also comes with great transparency that reduced the risk of confusion and fraudulent.

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Features of A DEMAT account

Easy Share Transfers

Through a DIS (delivery instruction slip) or RIS (receipt instruction slip), investors can easily transfer their holdings. These slips allow the account holder to access all the details required for executing the transfer.

Quick Dematerialization & Re-Materialization of Securities

Shareholders can provide instructions to their DP (Depository participant) for converting their physical certificates in an electronic format. Simultaneously, electronic securities can be converted into physical format.

Loan Facility

Certain lenders also provide loans against the securities held in the demat account of the shareholder. The holdings are treated as collateral to approve the loan.

Freezing the Accounts

If required, accountholders can freeze their account for a specific period of time. This will prevent from any unexpected debits or credits.

Multiple Accessing Options

As demat account is operated on an electronic platform, it can be accessed using multiple modes. The accounts can be accessed via any smart device such as smart phone and computer.

E-Slip Facility

As per the instruction of the National Securities Depository Limited (NSDL), security-owners are send instructions electronically instead of sending hardcopy of the slip to the depository participant. This makes the process more reliable, easy, convenient, and quick.

Corporate Benefits

The privileges offered by the company in the form of dividends, refunds, bonus, and interest are automatically delivered to the demat accountholders.

How to Open A DEMAT Account

1. First of all, select your depository participant that can be any financial institution such as banks, brokers, and custodians, which will actually work as an agent of the depositary to avail the services to the investors. 2. Fill the account opening application form and submit along with the copy of mandatory documents 3. In-person verification will be conducted by the depository 4. Once the verification process is complete, DP will provide a unique account number that will be treated as shareholder ID, which can be used for accessing the demat account online.

Top demat accounts in India

Angel broking

It is one of the popular full service brokers in India with PAN India presence and several sub-brokers across the country. Angel broking trades in all segments including NSE, BSE, MCX, and NCDEX. An investor, while dealing with Angel broking firm, has got multiple plan choices including Angel Preferred, Angel classic, Angel Premium, and Angel Elite. One can choose the plan as per their trade volume.

Zerodha

Zerodha is among the first brokerage firms to start discount broking service in the country. In a small span of operation, the company is doing great with its new technology. It is listed among the fastest growing, top volume contributors having daily turnover of around Rs.10000 crores on an average. Zerodha is said to be best trading firm for small investors as there are no minimum charges of brokerage per trade.

Zerodha brokerage charges:
Equity Delivery - zero brokerage
Equity Intraday - 0.01% or Rs 20 per trade, whichever is lower
Equity Futures - 0.01% or Rs 20 per trade, whichever is lower
Equity Options - flat Rs 20 per trade

ICICI Direct

ICICI direct demat account is an extended investment services from ICICI securities, which offers a wide range of investment alternatives. The full-time broker offers demat account services to the retail as well as the institutional clients. The trading is allowed in various financial products including IPO, mutual funds, Equities derivatives segment, bond, and fixed deposits among others. Being a full-service broker, the firm also provides advisory aid and online training sessions to help individuals seek the knowledge of stock market.

ICICI Demat Account opening charges:
Demat Account Charges - Rs 100
Demat Account AMC - Rs. 500
Trading Account Opening Fees - Rs. 975
Trading Account AMC - Nil

Motilal Oswal

Motilal Oswal Securities Ltd., incorporated in 1987, is an India-based diversified trading firm offering services in Equity, commodity, currency, and derivatives. The firm has been 4-time winner of best performing equity broker. Holding 30 years of wealth creation experience, it has a network spread over 500+ cities and towns along with over 2200 business locations in India.

Motilal Oswal brokerage charges:
Demat Account Opening Charges - Nil
Demat Account Annual Maintenance Charges - Rs. 441
Free Brokerage for first month
Equity intra-day trading charges - 0.03-0.015%
Equity delivery trading charges - 0.25-0.18%

5 Paisa

5Paisa is among the fastest growing stockbroker firm in terms of offerings and values brought to its clients. Recently, 5Paisa was listed at the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Working as an independent entity, the firm offers quite low brokerage charges starting from just Rs.10. while associating with 5Paisa, an investor is offered multiple trading platform choices including mobile app, reliable browser application (Trade Station), and a terminal-based software.

5Paisa demat trading charges:
Trading account opening charges - Rs.650 (one time)
Trading annual maintenance charges - Nil
Demat account opening charges - Nil
Demat account AMC - Rs.400

Religare demat account

Religare is an online share trading portal that enables trading and investments across all categories. The trading portal was established by Religare Broking Ltd. The trading portal is packed with smart features like advanced portfolio tracker, stock screener, live market watch, technical analysis of stocks and more, designed to cater investment needs of the investors from all walks of life. Religare functions with leading National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and MCX-SX trading exchanges.

Religare demat trading charges
Demat account opening - Nil
Annual maintenance charges - Rs.500 (from 2nd year onwards)
Intraday brokerage - 0.3% to 0.5%
Delivery brokerage - 0.30% to 0.50%
Derivative brokerage - 0.3% to 0.5%

Sharekhan demat account

Sharekhan is a trading company that has been operating across India for some time now. As we know, demat account is basically a dematerialized account that converts physical shares into an electronic format. Investors have had quite an easy and hassle-free experience with Sharekhan trading portal as they gain some insights in the trade market as well. Currently, the company has presence across 550 cities with more than 1800 offices and a strong client base of over 12 million happy customers.

Types of Sharekhan trading account:
Classic account - It is an online account dedicated to equities and derivatives transactions. It comes with smart features like real-time portfolio tracking, multiple watch lists, and integrated banking.
Trade tiger account - It is a net-based executable application for active traders who frequently trade during the trading session.

Sharekhan demat trading charges
Trading Account Opening Charges - Nil
Annual Maintenance Charges - Upto Rs. 750

Ventura securities demat account

Ventura securities ltd is operating since 1994 as a stock broking firm. The company is said to be a hub of financial products and services. It has a large network of sub-brokers, which gives the investors an opportunity to invest and trade in equity, derivatives, commodities, fixed income products, currency futures, and mutual funds. It is depository participant of National Securities Depository Limited (NSDL). Ventura provides trading services to PIOs, NRIs, and Foreign Investors as well.

Ventura demat account charges
Trading account opening charges - Rs.150 (one time)
Demat annual maintenance charges - 400
Demat account opening charges - 300
Trading account Annual Maintenance Charges (AMC) - Nil

Kotak Securities demat account

Enjoy the perks of trading with Kotak Securities operating since 1994. Kotak securities demat account is a single account to hold certificates of financial instruments including shares, government securities, bonds, mutual funds, and exchange-traded funds (ETFs). Apart from providing single online platform for trading and investment, it also offers margin facility against securities using shares in a demat account. Kotak securities also provide daily alerts, customizable research reports, and economic reports to its investors.

Kotak securities demat account charges :
Trading account opening charges - Rs.750 (one time)
Trading annual maintenance charges - Nil
Demat account opening charges - Nil
Demat account AMC - Rs.600

HDFC Security demat account

HDFC Securities is the trading arm founded in year 2000 as a joint venture between HDFC Bank Limited, HDFC Limited, and IndOcean E-Securities Holding Limited. HDFC securities is a full-service broker that offers convenient, flexible, and hassle-free trading experience. It operates through a huge network of 250 branches across India. It is a depository participant of Bombay Stock Exchange and National Stock Exchange. It is said to be among the top-rated e-brokerage platform providing features like real-time market data and multiple trading options across equity, mutual funds, exchange traded funds (ETF), Initial Public Offer (IPO), Bonds, Gold, and non-convertible debentures.

HDFC securities demat account charges:
Trading account opening charges - Rs.999
Trading annual maintenance charges - Rs. 750 (from 2nd year onwards)
Demat account opening charges - Nil

Key Benefits of The Account

1. The risk of fraud and skimming is reduced and the shares, bonds, and debentures are transacted under utmost safe and reliable gateways 2. Transaction cost is lower than the cost involved while dealing with physical counterparts 3. It is now easy and simple to invest in shares and securities online 4. Any number of shares can be transacted at a time 5. Hard copy of physical certificates often involve the risks such as fake certificate, theft, forgery, poor delivery, transfer delays, etc. An online trading system eliminates all these threats 6. Electronic settlements are quite easy, faster, and convenient