Gone are the days when you held a physical share certificate after buying a company’s stocks. This is why a demat account is your ultimate tool when it comes to holding shares and securities easily and securely without worrying about paperwork.
Here is why you REALLY need a demat account!
A Demat account—short for dematerialised account—is an account that allows you to hold company shares and securities electronically. You can hold dematerialised securities such as stocks, mutual funds, bonds, exchange-traded funds (ETFs), etc. in a demat account. So when you place an order to buy a stock, the shares get credited to your demat account. Similarly, when you choose to sell your shares, they get debited from your demat account. You can choose to open just a demat account or a 3-in-1 account that links your trading and bank accounts too. This enables you to trade without the need to move physical share certificates. Not only is it a storehouse for your investments, but it also speeds up transactions and reduces costs. Of course, there are more benefits of demat accounts too.
One of the biggest benefits of demat account for investors is that it is digital. Having said that, there are many other advantages of demat accounts that can be listed as follows.
1. Security Of Shares: The most important benefit of a demat account is that it is safer than holding physical shares which can get lost, damaged, or stolen.
2. No Forgery Or Theft: Since the demat account is electronic in nature, the risk of documents getting stolen, damaged, or lost does not exist.
3. Seamless Trading And Transfer: Unlike transporting physical certificates, demat accounts allow the transfer of shares quickly and securely. This has lowered order processing times.
4. Lower Cost:
Physical share certificates attract paperwork and stamp duty, which increases costs. With a demat account, all this is eradicated and you can get a demat account in no time.
5. Multiple Access Points: A demat account is operated electronically, which essentially means that users can access the account from multiple touch points—mobile, tablet, PC, laptop, etc.
These are just some of the benefits of demat account and its uses. Read the full list of advantages and different uses of a demat account.
Here’s another benefit of demat account—one that you can get only with Kotak Securities.
With a 3-in-1 account, your trades can get more seamless since your bank and trading accounts are linked with the demat account! Know more here
Opening a demat account can be very simple, and it requires minimal paperwork. Here’s how you can open a demat account. To open a demat account, follow the simple steps below:
Step 1: Fill the account opening form
Step 2: Submit documents
Step 3: Finish the in-person verification (IPV)
Step 4: Get an account number/ID
You could also opt for a digital demat account where the entire application process is online. The steps are similar: Fill in the application form, upload scanned copies of your documents, and complete the IPV. The only difference is that it all happens through digital channels!
The documents required for demat account opening are account opening form, identity and address proofs, and a passport-sized photograph.
Proof of identity (Aadhaar Card/Passport/Driver’s License)
Proof of address (Ration card/Passport / Rent Agreement / Recent Electricity or Telephone Bills)
Income proof (Income Tax Return/Salary Slip)
You’ll get the full list of documents accepted for account opening here.
How to transfer shares from one demat account to another? Want to switch demat accounts? Read how you can transfer shares between them.
Is a demat account required to invest in mutual funds? Read how you can invest in Mutual Funds through other modes.
All you need to know about demat accounts: Here is your cheat-sheet for demat account benefits, advantages, features and procedures.
Brokerage charges for demat account: Read how you can get the lowest brokerage charges.
Collateral amount for demat account: Out of funds to trade? Read about pledging your securities as margin.
How to use a demat account: Learn about all the different uses of a demat account.
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