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A dematerialized or demat account is a facility that allows investors to hold shares in an electronic format. This is similar to a bank account, where you keep your money. In this case, a demat account holds the certificates of your financial instruments like shares, bonds, government securities, mutual funds and exchange traded funds (ETFs).
You need a demat account before you start to trade on India’s stock exchanges.
What does Kotak Securities offer?
At Kotak Securities, you can open both demat as well as trading accounts either independently or at the same time. This is called a two-in-one account.
Kotak Securities also offers a three-in-one account – demat, trading as well as a bank account, together with Kotak Mahindra Bank Limited. This means, you won’t have to open three accounts separately, but instead do so with a single application form. Also, you won’t have to manually transfer money to your trading account from your bank account. The required funds get credited automatically.
How to open a Demat Account with Kotak Securities
Kotak Securities is a depository participant – the intermediary between CDSL and NSDL, and you. It is very easy to open a demat account with Kotak. Here are the key things that you require:
Filled application form for opening demat
Passport size Photographs
Proof of identity (Driving Licence, Voter's Id, Aadhar Card)
Proof of address(Passport, Driving Licence, Voter's Id, Aadhar Card)
Copy of PAN card
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Why Demat Account?
- Mandatory by SEBI
- Easy Portfolio Management
- Security of Equity Investments.
4 Reasons Why you need a Demat?
What are the benefits?
Since all your certificates are electronic, transactions are less cumbersome. You never have to deal with the physical documents and the related paperwork. When you trade shares or other financial instruments, there is no need to actually hand over certificates to the buyer or seller.
When you are dealing with physical copies of certificates, there are many risks involved like fake securities, bad delivery, incomplete paperwork, or simple destruction of the paper or ink. In the demat form, certificates last longer and you eliminate these risks.
Dealing in physical securities involves a lot of additional costs such as handling expenses, stamp duty as well as for safety. These are very hard to determine beforehand. All these are eliminated when maintaining a demat account. Also, all costs are detailed in advance.
Since we are dealing in the electronic format, delivery is completed within a few days. Earlier, this used to take weeks, if not months. This means transactions become seamless and inexpensive.
Several charges apply while operating the demat account. These are transparent and you (the account holder) must know these upfront. We mention below the exact charges along with the attendant conditions, so that there is complete clarity.
|Sr.No.||Account head||Rate||Minimum payable|
|1||Dematerialisation||Rs.50/- per request and
Rs.3/- per certificate
|2||Rematerialisation||Rs.10/- for 100 shares||Rs. 15/-|
- On market
- Off market
|0.04% of the value of securities
(plus NSDL charges as applicable)
(plus NSDL charges as applicable)
|4||Account maintenance charges
- Resident Indian
Rs. 50/- per month
Rs. 75/- per month
|5||Pledge charge||0.05% of the value of securities||Rs. 30/-|
|6||Invocation of pledge||0.04% of the value of securities||Rs. 30/-|
|7||Charge for client master change intimation||Rs.25/-||--|
More on charges +
- You do not have to pay any charges at the time of account opening. All other charges billed on a monthly basis
- In case of delays in the payment of charges, the demat_account account could be frozen for all operations. Please refer clause VIII mentioned in the agreement signed by you.
- "All market instructions for transfer must be received latest by 4.00 p.m. on the previous working day prior to the pay in day as per SEBI Guidelines. All off market instructions for transfer must be received atleast 24 hours before the execution date. Late instructions would be accepted at the account holder's sole risk and responsibility".
- Charges are subject to revision at the company's sole discretion and as per revisions in NSDL charges.
- Any service not quoted above will be charged separately.
- Value of transaction will be in accordance with rates provided by the Depository or actual transaction value, whichever is higher.
- Service tax and other statutory charges if applicable will be levied separately.
- Quarterly statements of transaction may not be sent to the clients, if there is no transactions and no securities balance in the account. Annual Maintenance Charges will NOT be levied in such cases.
- In accordance with the SEBI circular (Ref # SEBI Circular No. CIR/MRD/DP/22/2012 dated August 27, 2012) effective from 1st October 2012 all Sole or First Holders of a demat_account account having value of securities not exceeding Rupees Two Lakhs are eligible and have an option to avail Basic Services Demat Account (BSDA), As per the said SEBI circular, for availing BSDA facility, the individual shall have only one BSDA in his/her name across all depositories for availing this facility a request letter in the prescribed format (available at you nearest Kotak Securities branch) can be submitted with the account opening form. Also an existing individual client who is eligible to convert his Demat account into BSDA can do so by submitting the request letter in this regard. In case the BSDA account holder converts such account into Non-BSDA (regular account) account or the account holder ceases to meet the eligibility criteria for BSDA account, the charges applicable to Non-BSDA (regular account) shall be levied.
- For demat_account accounts having NIL transactions during the year, statement of holding will be sent only once in a year w.e.f. 1st October 2012
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More reading on Demat
When the Bombay Stock Exchange, the oldest in Asia, was founded in 1875, it was an open outcry floor trading exchange. This means traders would buy or sell stocks by verbally shouting prices on an open floor. Today, it is vastly different. It is an electronic system where you buy or sell stocks online.
Similarly, earlier, shares were physical receipts. On buying shares, you got a certificate. Over the years, people thought stock market trading was not for them because of the sheer paperwork involved in completing a transaction. Stock market settlements, wherein you receive shares if you buy or money if you sell them, were longer. In 1996, trading began on NSE for shares held in demat_account form. It was the beginning of a new paperless trading stock market trading environment. If you buy a share today, it gets credited to your account in two days. Today, shares get transferred to your demat_account account.
You cannot trade in the stock market without a demat_account account.Create a Demat Account Today ›
Here are some things to know about demat_account:
There are three key requisites for trading in the stock market – a bank savings account, trading account and a demat_account account. When you buy a share, you own a portion of a company’s assets. To prove your ownership, you are given a certificate. Today, this certificate is electronically available in your demat_account or demat_accounterialized account.
For this reason, the first step of trading in the equity market is creation of a demat_account account. There is a central database of all demat_account accounts. It is called a depository. There are two depositories – CDSL and NSDL.
Banks, brokers and financial institutions are empowered to offer demat_account services. They act as the intermediary between the central depository and the investor, and are called depository participants (DPs). This means, CDSL and NSDL hold details of your shareholding on your behalf, just like banks hold your money in different kinds of accounts.
Just like the demat_account account, a trading account is a must for investing in the stock market. You register for a trading account with a stock broking firm. Each account comes with a unique trading ID, which is used for conducting transactions. To conduct a trade, you deposit some money in your trading account. This is linked to your demat_account account. Using the money in your account, you place an order for a stock. Once the order is processed, the stock exchange identifies that the order belongs to you using your unique trading ID. It then forwards the shares to your demat_account account
At any time, your demat_account account reflects the details of your portfolio. This includes stocks, bonds, mutual fund units, Exchange Traded Funds (ETFs), as well as government securities in electronic form. So, whenever you invest by buying stocks, it will be credited to your demat_account account. Similarly, if you sell any of your holdings, these will be removed from your account.
NO MINIMUM BALANCE
A bank account requires a minimum balance. However, this is not so for demat_account. There is no minimum number of securities required to keep the account rolling.
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