How To Open And Operate A Demat Account?

Have you ever wondered what you need to do while start trading in the Indian stock market? All you need is a Demat account and the money to trade. Sounds hassle-free, doesn’t it? Read on to learn more!Demat is short form for Dematerialized account to buy or sell stocks and shares. In other words, a Demat account, means holding the electronic listing of your shares.

You can open a Demat account with any registered depository participant (DP). To get a list of registered DPs, you may want to visit the NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) websites. Once you have chosen your DP, go ahead and complete the formalities of opening an account. This typically involves the following steps:

• Filling an account opening form.
• Signing an agreement with the DP
• Submitting documents supporting the proof of your identity, address, two pass port photo copies, and for sure Pan card which should be attested copies of your account details given by the bank, copy of work permit, copy of passport etc.

Once the account is functional, the DP will allocate you a unique Beneficial Owner Identification (BO ID) to quote while making transactions. While selling shares, provide the DP with a delivery instruction, following which your Demat account will get debited and payment for the transaction will be made through broker/ sub broker / bank. Similarly, while buying shares, you will need to place an order for the shares by quoting the BO ID. The shares will be credited into your Demat account by the DP. Payment towards the buying transaction will be taken from your NRE bank account.The DP will provide you with periodic statements of your stock holdings and transactions. The charges for opening and maintaining the Demat account differs with DPs. A fair idea of comparative rates can be obtained from the NSDL and CDSL websites.

On the long run, Indian stock markets today is on an upward trend, with tremendous growth opportunities in short and long term investments. A Demat account could pave the way for you to benefit from the current stock market upsurges and build a healthy portfolio for the future.