Demat Account: What is a Demat Account? What are its benefits, know the process of opening it
It is necessary for investors to have a Demat account to buy or sell stocks in the stock market. Just like a bank account holds money, in the same way, a Demat account holds your investments in electronic form.
Highlights
- To trade in the share market, you must have a Demat account.
- You can open a Demat account with NSDL or CSDL.
- You can access the Demat account through the internet with your laptop or smart device.
New Delhi. According to the rules made by the market regulator SEBI (SEBI), if you want to buy or sell stock from the stock market, then you must have a Demat account. Nowadays, we keep hearing the name of Demat account all the time, but many people do not know what it is. Today we will talk in detail about Demat account and how to open it here.
Explain that a Demat account is like a bank account, in which you can keep shares and other information in electronic form. Demat account means dematerialization account. In this, the process of holding investments like shares, bonds, government bonds, mutual funds, insurance, and ETFs becomes easy. Through this accounting, accounting of maintenance of stock and related documents is avoided.
A Demat account is mandatory for investing in the share market.
In today’s digital era, everything has started becoming digital. In such a situation, no paperwork is done and no physical certificate is issued. In such a situation, when you buy shares of a company, whatever you get, gets recorded in electronic form in your Demat account. In such a situation, if you want to invest in the share market or any other risky place, then it is mandatory to have a Demat account.
How to open a Demat Account?
There are 2 major depositories in India – National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). When you approach a Depository Participant (DP) to open a Demat account on your behalf, they usually open the account with CDSL or NSDL. You can open a Demat account by visiting the official website of the preferred DP.
Demat account keeps your investments in electronic form
Significantly, the way money is kept in a bank account, in the same way, a Demat account keeps your investments in electronic form. It is easily accessible with your laptop or smart device and the internet.
