A savings account is often just your first step towards financial security. If you want to grow your wealth, you’ll need a demat account too.
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What Is A Demat Account?
A demat account is somewhat like a bank account. It is an online account that holds your share certificates or securities in digital form.
How To Open Demat Account
- Select the DP with whom you will open the demat account.
- Fill out a demat account opening form.
- Submit the form to the DP along with a passport-sized photograph and copies of the required documents.
- Carry all original documents for verification.
- An in-person verification will take place thereafter.
- On approval of the application, the DP will send you the client ID and account number.
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What Can A Demat Account Hold?
Demat accounts hold more than just shares. They also store bonds, mutual funds, non-convertible debentures, exchange-traded funds, and gold in the demat form.
Demat accounts are thus suitable for all kinds of investors. Plus, they are convenient and safe.
Benefits Of Demat Accounts
- One-stop shop for holding all securities in your portfolio
- Quick and convenient transactions
- Accessible from anywhere
- No stamp duty
- Direct communications with depository participants (DPs) and companies
- Reduced paperwork
- Greater safety than with physical certificates
Related: Features of demat account
What The Future Holds
The government has approved a proposal for creating a national database of academic certificates. Soon, even academic marksheets could be issued in the demat form. So, the usefulness of demat accounts in India is likely to increase.
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