Demat account popularly used short name for dematerialised account, is something you would require in case you

wish to online purchase and sale of securities such as stocks, mutual funds, gold etfs, etc. Although you have the option of receiving securities in physical or demat mode, it would be advisable for you to receive the dematerialized form of your Security.

Demat account and its functioning resembles that of a bank account. Just the way a savings bank account holds money, a demat account holds securities. It helps in holding securities electronically, or in other words, in dematerialized form. This feature helps in doing away with all the negative points of physical possession of securities. In addition, a periodic statement of transactions and holdings is also provided by the Depositary Participant (DP) that is similar to bank statement or passbook

Online trading means that you can trade during the trading hours from wherever you feel like. As we all know, you cannot carry out onlicenario, online trading is the norm of the day, given the convenience it provides. Demat account opening is very simple. All you are supposed to do is to approach a DP registered with SEBI, the regulator of Indian Stock Market. Demat services are presently being offered by all stock broking houses, as well as several financial and banking institutions

 These

stock broking firms also offer depository services and, thus, also known as depository participants. By definition, a depository participant is an intermediary between depositories, like NSDL and/or CDSL (CDSL - Central Depository Services Ltd. NSDL - National Securities Depository Ltd), and an investor. Demat account has to be opened while registering with a share broker or a sub-broker. There are just 4 simple steps for demat account opening:

 Select

& approach a certified DP (eg. ShareKhan, HDFC Securities, Unicon Securities, IIFL etc.) Fill up demat account opening form given by the DP. Attach xerox copies of proof of address and proof of identity along with the demat form.etc.) Produce your original PAN card during demat account opening.

Opening a trading account along with opening demat account is highly recommended. Following are the things that you will be able to do with just few clicks once you have a demat and an online trading account. Nowadays, practically all trades have to be settled in demat form. Although the market regulator, SEBI, has allowed trades of up to 500 shares to be settled in physical form, nobody wants physical shares any more. So a demat account is a must for trading and investing in the Indian share market.

 Opening

a demat account for trading in the Indian share market is as simple as opening a savings bank account. You have to approach a Depository Participant (DP) to open a Demat account. Most banks and share brokers that offer share trading services are DPs.

It is highly recommended that you also open an online trading account (if possible) when you open a Demat account. Here is a list of things that you can do with a few clicks once you have a Demat account and an online trading account linked to it. Purchase and sale of shares and stocks of any company on BSE and NSE Online investment in mutual funds online without any paper work Investment in Gold through Gold ETF's

IPO (Initial Public Offer) subscription Online trading in Futures and Options Investment in Liquid BeEs
Online

 Liquid

BeES (Liquid Benchmark Exchange Traded Scheme) is the first money market ETF (Exchange Traded Fund) in the world. The investment objective of the Scheme is to provide money market returns. Liquid BeES will invest in a basket of call money, shortterm government securities and money market instruments of short and medium maturities. It is listed and traded on the NSE Capital Market Segment and is settled on a T+2 Rolling basis.

Demat account can be opened with any registered DP or depository participant  One who is wondering how to open Demat account should get a list of registered DPs in the websites of National Securities Depository Limited and Central Depository Service Limited  The willing person should fill a demat account opening form.The customer should submit attested photocopies of his/her details. The documents needed for opening a demat account are:


 Pan

Card (Pan card would work as a proof of identity normally) Identity & Residence proof Photocopies of passport or driving license You will have to submit a passport size photograph on which you sign across When opening an account with a bank, you need a minimum balance. Not so with a demat account. A demat account can be opened with no balance of shares. And there is no minimum balance to be maintained either. You can have a zero balance in your demat account

 One

would have to sign an agreement with DP in a depository prescribed standard format, which details rights and duties of investor and DP. DP should provide the investor with a copy of the agreement and schedule of charges for their future reference.

There are four major charges usually levied on a Demat account: Account opening fee, annual maintenance fee, custodian fee and transaction fee. All the charges vary from DP to DP. Demat account opening fee: Depending on the DP, there may or may not be an opening account fee. Annual maintenance fee: This is also known as folio maintenance charges, and is generally levied in advance.

 Custodian

fee: This fee is charged monthly and depends on the number of shares (international securities identification numbers ISIN) held in the demat account. It generally ranges between Rs. 0.5 to Rs. 1 per ISIN per month. DPs will not charge custody fee for ISIN on which the companies have paid one-time custody charges to the depository

 Brokerage

/ Transaction fee: The transaction fee is charged for crediting/debiting shares to and from the account on a monthly basis. While some DPs, charge a flat fee per transaction, some peg the fee to the transaction value, subject to a minimum amount. Some DPs offer a frequent trader account, where they charge frequent traders at lower rates than the standard charges. The fee also differs based on the kind of transaction (buying or selling). Some DPs charge only for debiting the shares while others charge for both. The DPs also charge if your instruction to buy/sell fails or is rejected

 In

addition to the other fees, the DP also charges a fee for converting the shares from the physical to the electronic form or viceversa. This fee varies for both demat and remat requests. For demat, some DPs charge a flat fee per request in addition to the variable fee per certificate, while others charge only the variable fee.

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charges can be levied by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership

 Within

15 days of submitting the form and associated documents the DP will open the account in the system and give an account number, which is also called BO ID (Beneficiary Owner Identification number). You can then start applying for shares or transfer in your shares from other DP's or purchase shares from a broker or even apply for mutual funds, bonds etc.

 As

per SEBI instruction for an individual to trade in stock market one is supposed to own a demat account which is a short and popular form of dematerialized account. In India, concept of demat account was adopted in 1996 and because of fast and safe transaction of securities it become popular among all the related entities.

 Demat

account is used for holding securities in electronic form and their transactions too, one need to open demat account with depository participants, because of several advantage over older version of trading , the concept of demat account played an important role to attract new investors inshare market. Using of demat account not only makes transactions safe and fast but it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation.

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team remains in touch with sales agents and customers of different Stock Broking companies on regular basis to update different charges and facilities broking companies offering to their customers. So compare the demat Account Charges below for choosing the best demat account for yourself.

 Share

Broker : India Infoline Demat Account Opening Charges: Rs.750 Demat AMC: Rs.25 p.m. Software Charges: Free of cost Intraday Brokerage: 5p, 2p Delivery Brokerage: 50p, 20p Share Broker : India Infoline Demat Account Opening Charges: Rs.750 Demat AMC: Rs.25 p.m. Software Charges: Free of cost Intraday Brokerage: 5p, 2p Delivery Brokerage: 50p, 20p

 Online

trading account eliminates risks associated with physical certificates such as bad delivery, fake securities, postal delays, forgery, loss due to fire, theft or mutilation

Online trading account helps in automatic credit into demat account of shares arising out of bonus/split/consolidation/merger etc. Enables easy receipt of public issue allotments

Demat account ensures faster payment on sale of shares and hence more acceptability and liquidity of shares Demat account holders can also avoid stamp duty (as against 0.5 per cent payable on physical shares)

No odd lot problem, even one share can be sold via a demat account Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately. Transmission of securities is done by DP eliminating correspondence with companies. It enables holding investments in equity and debt instruments in a single account

Demat account is must for investing in share market. Investors can buy or sell stocks with a demat account. Demat Account is safe and convenient way to hold securities. For example - If you are holding your shares, bonds etc in physical form, there are chances of its theft and loss. However, In demat account you can preserve your investments safe and secure. You can transfer your securities immediately if you have a demat account.

 There

are no chances of signature mismatch because most of the process of buying and selling dematerialized securities is electronic. There is no stamp duty on transfer of securities. Major Reduction in paperwork involved in transfer of securities. Reduction in transaction cost.

 Demat

Account helps in easy settlement of the ownership title of securities, and provides easy receipt of public issue allotments. No odd lot problem, even one share can be sold thus there is advantage. Change in address recorded with DP gets registered with all companies in which investor holds securities

 Whenever

it has been about gold investments, people only think of investing in gold ornaments and bullion, including gold coins, biscuits and bars. And to invest in these gold options there were only 2 entities to be approached, either a jeweler or a bank. Now that people are venturing out to try new options, e-gold investments are witnessing a rise. And among the e-gold investments are the gold ETFs(Gold backed Exchange Traded Funds (ETFs) are securities designed accurately to track the gold price. ), gold futures and the latest, E-Gold.

E-Gold trading is becoming an increasing preferred way of gold investing. Following are some pertinent facts about e-Gold E-Gold has been introduced by The National Spot Exchange Limited (NSEL) as part of E-series investment products in commodities that also includes e-Silver. E-Gold units, where one unit equals 1 gram of physical gold, is purchased and sold through the spot exchange just like shares. There is the option of investing in small quantities in demat account, the minimum being 1 gram of e-Gold.

 There

is also the liberty of taking physical delivery of gold through the exchange whenever desired. It's better than gold jewellery as you don't lose out on any jewellery making costs. You don't need a locker as e-gold is held in demat form, so it's 100% safe and has lower holding costs E-Gold is 99.9% pure gold and you have the flexibility of buying more or selling your egold at any time. It's 100% liquid.