6 Must Know Points To Remember before Opening A Demat Account
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- Updated 17 Mar 2023
To trade on the stock market, it is essential to have a demat account. A demat account opening is imperative with a registered Depository Participant (DP). There are numerous registered depository participants, and hence it is vital to select the right one.
As an investor, opening a demat account can provide you with many benefits. Click here to know the advantages you receive on opening a demat account. You may want to choose a broker such as Kotak Securities based on transaction ease and quality of information.
Here are six must-know points to help you make an informed decision when opening a demat account.
1. Types of brokers:
There are two types of broking firms. These include discount brokerages and full-service brokers. A discount broker carries out transactions in equity and derivatives based on the investor's directions. A full-service broker offers services over and beyond a discount broker along with additional services such as investing in mutual funds, insurance and IPOs. Full-service brokers such as Kotak Securities are large broking firms with extensive online and off-line presence.
2. Fees:
Opening a demat account entails specific charges. These include annual maintenance fees, transaction costs, conversion fees and more. Charges vary from one DP to another. It is crucial to look into these fees before opening an account with a registered DP.
3. Instantaneous information:
A demat account offers real-time information and current happenings on the stock market. Also, you receive analytical and expert opinions on stock recommendations. Such data is critical in buying and selling stock at the right time.
4. Nomination:
You may want to identify a nominee at the time of opening a demat account. This is to ensure that all your investments are transferred to a nominee of your choice, in the event of your demise.
5. Technology and software:
Another critical factor before opening a demat account is to look into the trading software of your prospective depository participant. User-friendly software can ensure speedy and smooth transactions. Choose a broker that offers the latest, yet easy-to-understand user interface for effortless investments.
6. Online and off-line support:
Sometimes, things may go out of hand while making a transaction. Under such circumstances, it is imperative to receive on-time help from an easily accessible customer support team who can resolve your issues quickly. Look into the back-end support of the broker before you opening a demat account.
