All About Trading and Demat Account services That You Need to Know
A demat account is basically a dematerialized account. It allows investors to hold shares with an electronic format. It’s similar to a bank account, where you save your money. A demat account carries the certificates of your financial instruments such as bonds, shares, mutual funds, government securities and exchange traded funds. You cannot trade on India’s stock exchanges without a demat account. On the other hand, trading accounts are used to buy, sell or place orders in the stock market. If you plan to trade in the stock market then you need to have a trading account. Every account activated comes with a unique trading ID, which is used to conduct transactions.
Features and Benefits of Trading and Demat Account
- You can sell, hold or purchase shares in electronic form
- Transaction statements on a monthly basis & Holding statement on a yearly basis are provided
- Quick transfer saves you a lot of time
- No risk of theft, loss or mutilation of shares
Documents Required to Open a Demat or Trading Account
- You need to submit ID and address proof along with a passport size photograph and the account opening form. Originals are required only for verification. For submission only photocopies are required.
- ID proof can be a passport, bank attestation, voter's ID, driver's license, PAN card, electricity bill, IT returns, telephone bill.
- As an address proof passport, ration card, voter ID card, bank passbook, driving license, verified copies of electricity bills etc. can be used.
This is easy
Opening a Trading and demat account is not at all tough. All you need to do is fill the Form, fill in the correct details of all the share certificates you hold and submit it with a physical share receipt. Once your form is approved, your account will automatically update and will reflect your shares.
Charges to be Paid to Open a Trading or Demat Account
- If you plan to open a trading or demat account start off by paying the account opening charges.
- Once your account is open you have to pay annual maintenance charges per annum.
- There are brokerage charges as well. It can either be flat fee per trade or a percentage of the value available.
Positives and Negatives of Low-Cost Brokerage Firms
Brokerage firms are nothing but a link between buyers and sellers. To avail the Trading and Demat Account services you may or may not need brokerage firms. But in most of the cases people do involve them as it is hard to understand the facts related to finances. The high-cost brokerage firms are not too popular in India as compared to the low-cost ones. So let’s discuss its pros and cons.
- Most of these firms are offering zero account opening charges
- Some of them even offer zero account maintenance charges
- It is a very good option for those who are frequent investors as they charge less for stock market transactions.
- Fund transfers to bank accounts take time
- They have very poor customer service