The stock market investment process has become very easy in modern times. People can now invest in the stock market securities using their smart devices from anywhere. Securities can be actively traded that are bought and sold using such online trading platforms. An individual trader investor can invest in stock market securities while sitting in the comfort of their home. However, he or she has to fulfill certain rules and prerequisites before investing in stock market securities like the opening of a Demat account. Dematerialization of stock market securities has made it essential for opening a Demat account with a depository participant. A depository participant can be a stockbroker or even a bank in India.
An individual trader or broker can now invest in the stock market securities using online trading platforms and Demat accounts which can be in the form of an online website or application which can be downloaded on smart devices like mobiles and tablets. Stockbrokers provide various services to individual investors. One of the most important services is the opening of a Demat account. Some brokers and brokerage companies charge a fee for opening a Demat account which may vary from one stockbroker or company to another. The fee may range between ?200-300. Stockbrokers have started to provide services like the opening of a free Demat account in India. There are certain steps that an individual has to follow for opening a Demat account. This includes:
- Submission of account opening form with a depository participant like a broker or bank
- Submission of necessary documents like identity proof, permanent residence proof, income statement, a canceled cheque, and passport-sized photographs, etc.
- Signing an agreement consisting of rules and duties related to stock market investment procedure and submission of the same with the depository participant.
- Getting a unique Demat account number for safekeeping.
The most important aspect of opening a Demat account in India with a depository participant is that an individual is not required to hold any security for opening a Demat account. A Demat account with zero number of shares or other types of securities can be opened by following the above-mentioned steps. No minimum balance is required for opening a Demat account in India. Moreover, an individual investor must request for dematerialization of paper-based securities for crediting them into an online Demat account.
There are various benefits of opening a Demat account. Some of these are listed below:
- Allowing individuals to transact in digital and dematerialized securities in an easy and hassle-free manner. Securities can be debited from and credited into an individual’s account easily, automatically and within minutes which in turn increase liquidity. Individual investors can easily transfer or accept new securities easily using a Demat account.
- Reduction of human effort and decrease in chances of errors as securities can be transferred easily and securely only upon proper authentication and identification. Transacting using Demat accounts tend to be more reliable and secure as compared to the traditional mode of investment.
Various brokers provide the service of opening a free Demat account in India. Investors must identify the brokers and brokerage firms that provide such service for better and efficient stock market investment.