Demat Account

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Demat Account is easy ways to maintain your shares and investments that you have traded in over a period of time. Demat account, short for dematerialized account, is an electronic account used to hold securities and investments in electronic form. When you buy or sell securities through a stock exchange, the transaction is settled electronically, and the securities are held in your demat account.

This account is required to carry out buy or sell transactions in the securities markets. A stock broker, being a member of the stock exchange, is registered with and regulated by the exchange. The bank account, demat account, and trading account could be linked. However, at least one bank account must be linked to the demat account as well as the trading account.

To open a demat account, you generally need to provide the following documents:

- Applicant's Pan Card

- Applicant's Aadhar Card

- Address Proof

- Passport size photo

- Proof of income

Types of Demat Account

Regular Demat Account: Regular Demat account is for Indian citizens, This type of demat account is the most common and is used by individual investors to hold securities such as stocks, bonds, mutual funds and exchange-traded funds.

Repatriable Demat Account: Allows NRIs to transfer funds from their foreign bank accounts to India, Non-Resident Indians (NRIs) have the opportunity to participate in the Indian securities market. This enables NRIs to possess and oversee their investments in India, encompassing stocks, mutual funds, and other eligible securities.

Non-Repatriable Demat Account: This account is also related to Non-Resident Indians (NRIs), These accounts are not eligible for transferring funds from overseas. An individual must connect an NRO bank account to own and manage this category of Demat account.

Benefits of Demat Account

Removes Risk: Demat Accounts hold shares online, ruling out the risk of loss or theft.

Cost Effective: With a Demat Account, buying and selling of investments is done online, making it quicker and cheaper than paperwork.

Single Account, Many Uses: Apart from shares, a Demat Account lets one hold many other securities such as Bonds, Government Securities, Mutual Funds, etc. in a digital format.

Loan Facility: Investments in a Demat Account can be used as security for taking a Loan.

Easy Access: Demat Accounts are online. So, they can be accessed anywhere via a laptop, tablet or smartphone.