Opening a Demat account and trading account is the first step of an individual interested in the share market. You need a Demat and trading account to hold your financial securities and trade in the equity and equity derivative segment.
You can open a Demat and trading account with a SEBI and stock exchange registered stockbroker.
You should meet the following eligibility criteria of a registered stockbroker to open an online demat trading account.
- You should be an Indian resident.
- Have attained the age of 18 years or above
- Have your PAN card
- Have a valid address proof. It can be any of these – Your Aadhar, Voter ID, Driving License, Passport, utility bill.
It is simple to have a demat account. You can enquire about demat account charges by just entering your name, contact details, and PAN details.
Let us explain the benefits and requirements of demat and trading accounts.
What is Demat Account
A Demat Account is required to hold financial securities in electronic format as you can not access stock investments offline. Whether you want to invest in shares, Bonds, Mutual Funds, ETFs, or government securities, you can hold your securities digitally without any hassles. It is safe and secured online storage for all your financial securities.
Benefits of Demat Account
- Demat account has eliminated the risk associated with paper-based securities like theft, damage, loss.
- It is convenient online storage for a variety of financial securities.
- You can get automatic updates of upcoming IPOs, bonus issues, stock splits, etc.
- You can buy even a single share through demat accounts. There is no issue of odd lots now.
- It has reduced the cost of holding securities as compared to paper-based securities.
- It is easily accessible online.
- You can transfer your shares easily and quickly from one demat to another.
What is Trading Account
The trading account is mandatory to buy and sell, i.e., trade your financial holdings. Demat account can hold your securities, and a trading account is an interface between your demat account and bank account. It is not possible to buy or sell securities without a trading account. The trading account connects you to the stock exchanges and finds sellers and buyers for a trade. Once the trading transaction is completed, the debit and credit of securities will be reflected in your demat account.
Benefits of Trading Account
- You can trade stocks, currencies, bonds, exchange-traded funds (ETFs), commodities using your trading account.
- A trading account is one-point access for multiple stock exchanges like BSE, NSE, etc. Thus, you can make trades through multiple mediums.
- Trading accounts are flexible to use on mobile, desktop, or tabs. You can make a call as well to your stockbroker to place a trade.
- You can open an online trading account at the comfort of your home.
How to open demat and trading account
The demat and trading account opening process is 100% digital. You need to sign up with an online stockbroker to start the process.
Step 1: Go to your broker’s website and access the demat account opening form.
Step 2: Enter your details like name, PAN, and contact details like an active phone number and Email ID.
Step 3: Upload soft copies of your documents:
– Your PAN card
– Address Proof
– Identity Proof
– Income Proof
– Your Signature
– Passport size photo
– A canceled cheque
Step 4: Submit this filled-in form.
Step 5: Go through the in-person verification (IPV) online process.
It is as easy as that. Once you go through the IPV and verification of documents completed, you will be allotted your Demat and trading account log-in details. You are ready to enter the stock market.