All investors have to have a demat account as it has been made compulsory by the SEBI (Securities Exchange Board of India). When you want to access your demat account, you need to have two passwords, an internet password as well as a transaction passwords. The two passwords add a double layer of security. Purchasing and sale of securities is done automatically once the transactions are electronically completed and this is the USP of a demat account.

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Process to Open an online bank demat account:

Setting up a dmat account is a pretty simple task. You need to open a demat account when you have registered yourself with a broker or a sub broker. What you need to do is:

• Approach a certified stock broker. There are a lot of those around in India! These include ICICI, Sharekhan, Karvy Finapolis etc.
• These brokers will give you a demat account opening form. What you need to do is correctly fill up this form.
• You will also need to furnish documents for address proof and identity proof in support of the account opening. It’s not a big deal; all you need to do is follow the SEBI guidelines which will be provided to you.
• Furnish your original PAN card while opening a DEMAT account. This has been made mandatory by the SEBI.

But a lot of times people are clueless as to what documents they should submit for the opening of the demat account. These include:

• Your PAN card
• Identity proof- you can choose to give your driver’s license, passport, voter’s ID card or even a ration card with a photo.
• Recent Passport sized photographs (two)
• Address proof- you can submit your driver’s license, Voter’s ID card, Bank statement, Passport, ration card with a photo, credit card with a photo or even a government utility bill of any sort (like your telephone bill or electricity bill).

You will also have to sign an agreement with your DP in the prescribed standard manner which will basically enlist all the duties of the investors as well as his rights and those of the DP’s too. You should keep a copy of the document and also a schedule of the charges which the DP is likely to charge you in the future.

You will also be given an account number also known as the Beneficiary Owner Identification Number (BOIN). Your DP may also choose to change the charges he will levy by giving you about thirty days’ notice.

Dmat Account Charges

The charges you need to pay can be categorized into four distinct classes:

• Account opening fee- often this is optional. This is also fully refundable so you can get back the amount when you close the demat account.
• Annual Maintenance fee- Chargeable in advance and this is basically charged by your bank.
• Custodian Fee – This fee is charged depending on the number of securities present in your demat account in a given year.
• Transaction fee- There are several schemes for paying the transaction fees – it might be a flat rate or a percentage of the transaction.

Opening a demat account might seem like a hassle, but it makes trading much easier.

To get started in stock trading, you need to open a demat account at either a bank that is authorized to open a demat account, various financial institutions and some top drawer stock broking houses that are registered directly with the major stock exchanges. The broking houses are a conduit between you and the CDSL or the NSDL. You are the investor in this case as you would be buying and selling stocks. Many large broking houses are also known as depository participants or DP.

Your identity in the Indian stock market

A demat account works just like a social security number, but its scope is limited only to the trading in shares. By opening a demat account you are identified as a trader and all transactions made by you, are routed through the demat account for storage in electronic form. You may buy or sell shares and at the click of a mouse your account can be accessed and your holdings known. To begin with, you have to apply to a DP that could also be a bank or a financial institution apart from a broking house.

To open a demat account you need to provide proof of address, copy of the PAN card that is required for all income tax purposes, photographs, demat forms filled out and also income tax returns to prove that you are a genuine tax payer. You need to open an account with the bank as a primary step to opening a demat account. It could be a savings and a demat account where the profits or losses from share trading can be credited or debited. You have to pay nominal charges toward your demat account.

Charges are not the same with all DP’s and they can change over a period of time. Primarily, you would be required to pay an account opening free, a transaction fee and an annual maintenance fee. Once the demat account is opened, the next step is very simple. You can get along with share trading instantly.

To avoid scams

The need for a demat account arose when several scams broke out in the stock market. You cannot trade in different names anymore. Many NRI – non resident Indian investors were found to conceal their share trading profits by operating under different names, while some big players even managed to tune the market to their advantage. There were unnecessary bull runs or bearish tendencies in the market as large lots were sold.

Small investors suffered immensely as they lost much of their savings in the process. With the opening of the NRI demat account, any previously held share that is on paper can be dematerialized and any shareholding in your name would be reflected.

Whenever you want or according to the system of the DP, you would get a statement of accounts that would reflect your current position. After the demat account is opened, for the purposes of share trading at the stock exchange, you would be given a unique beneficiary owner identity number that would serve as a reference for all share transactions. You need the delivery slips for selling shares and you can collect them from your DP. By opening a demat account, you bring out in the open all that you hold and every information regarding your holdings is clear and open.

For opening a dmat account you must visit the best NRI broker:

www.NriInvestIndia.com

NRI Demat Account

Nowadays, investing in the stock market makes it necessary for you to have a demat account. With new IPO’s coming into the market, investors are gearing up to park their money in them. Earlier, a sheaf of papers made up the holdings. But with a demat account or a dematerialized account, all your shares are now in electronic form. In a paperless society, demat has been a great boon to investors in stocks as their holdings and prices and present values can easily be found out at the click of a mouse.

Demat accounts are easy to open at banks, brokerage houses and financial institutions. With so many available, options more and more people are getting a demat account done for investing in stocks to make money online from the comfort of their homes. When the broking houses open a demat account for you, they act a depository participants as they are a go-between the investor and the NSD or CDSL.

If you are an NRI – non resident Indian or a PIO – person of India origin and interested in trading in stocks or dematting physical shares, then the first thing you need to do is open a demat account with a DP or depository participant by filling out applications forms along with the required documents.

It is only after you get a demat account done in your name; you can open a trading account with the broker that you fix up. It is easy these days as all the major broking houses are online and it takes come research on the internet to get a good broker who charges reasonable commission on the transactions.

You can check out the client reviews or ask friends, co-workers or relatives if they are into stock trading for a reliable broker. Brokers are supposed to be the very medium for trading in stocks and the medium has to be reliable as you would have to trust him or her with your stock trading operations.

Your demat account is like an open book and record where all the transactions of shares that you have bought and sold get reflected. If you hold a share that was physical, it can also be dematerialized in electronic form. You don’t have to worry about shares you had bought earlier when demat wasn’t there. You can easily transform the paper stuff into electronic form and they would all reflect in your demat account.

After dematerialization of the physical shares, they would be transferred to your demat account. Your broker or depository participant provides regular account statements that show the balance in your demat account and the transactions that you have done during the period.

While choosing your DP, you should keep in mind the location as it should be preferably near you. The DP service that you look for should be conveniently located and the charges should be in conformity with that of the market. DP charges may differ among different institutions, but the charges would be the account opening fee, maintenance to be paid yearly, service tax and transaction fee.

Banks usually don’t charge the initial fees for account opening. It is better to opt for a bank where you already have a savings account. You can easily get the documentation and paper work done as the banker would be known to you.

You need to provide the filled out form with passport size snaps, copy of PAN card as an identity proof, passbook copy and proof of address that could be a ration card, voter’s ID or passport.

The agent will then take up the other formalities needed for getting your account opened and provide you with a unique account number for all transactions in stocks. You should collect the delivery slips that will debit your account and credit the broker’s account.

Get started, open a NRI demat account for all your demating needs today: www.NriDemat.com

With growth in technology, nobody wants physical shares anymore. Hence although the SEBI has permitted a limit of 500 shares in physical form, having a DEMAT account has become a must as almost all trades are settled in dematerialized form.

If you are wondering why a DEMAT account, well the same has many benefits attached to it:

• Reduces brokerage charges
• Pledging of shares is easier
• Enables quick ownership of securities on settlement resulting in increased liquidity
• Avoids confusion in the ownership title of securities
• Provides easy receipt of public issue allotments
• You avoid bad deliveries caused by signature mismatch, postal delays and loss of certificates in transit
• Eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation
• Avoid stamp duty and filling up of transfer deeds
• Obtain quick receipt of benefits like stock splits and bonuses

Now that you know the advantages, if you are thinking of opening a DEMAT account, please note that it is extremely simple. All you need to do is contact your nearest Depository Participant (DP) [you may visit the NSDL and/or the CDSL website to acquaint yourself with your nearest DP]. Broadly speaking, opening a DEMAT account will involve the following:

• Filling an account opening form.
• Signing an agreement with the DP
• Submitting documents supporting the proof of your identity and address, which may be attested copies of your account details given by the bank, copy of work permit, copy of passport etc

As soon as the account becomes functional, you will receive a Beneficial Owner ID (BO ID) that will be unique and you are required to quote it in the event of further transactions. While buying shares, quote your BO ID and place your order for your desired share. The money will be taken from your NRE account and the shares will be credited in your DEMAT account by your DP. On the other hand, while selling shares, provide your DP with the required instruction, and your DEMAT account will get debited with the payment being made through broker/sub-broker/bank. Your DP will provide you with a periodic statement of your DEMAT account.

Please note that the charge for opening a DEMAT account varies with the DP. An average may be obtained from the NSDL and/or CDSL websites. A good website where you can find all the necessary details about opening up or registration of a demat can be found at: www.Demat-Account.com