What do you mean by a Dematerialized account?
Dematerialized account is also known as a Demat account. Today many brokers provide you with online demat accounts in India. It is an electronic account where you can hold and manage all of your shares as an investor. You can start a demat account by opening on with a broker or a bank. You will need a PAN (Permanent Account Number) card to open it. It takes a couple of days after you purchase a share for it to be seen in your account.
The shares you buy will get credited to your account a few days after you buy. Although it is easier to receive your information about you shares through your demat account, you can still receive it physically too.
If you decide to receive your information in dmat mode, then you will need to mention the name of the DP (depository participant) in the application for dmat in India. It would be a good idea to receive it in demat form because physically, you face a risk of the information being forged or fake. If you want to purchase and sell stocks, a demat account is necessary.
Why do NRIs need a Demat Account?
Today, most trades have to be put through in demat form. Even though the SEBI has let trades of around 500 shares be put through in physical form, it is a lot easier and a lot more accurate in demat form. When trading and investing, a demat account is needed.
What is the difference depository and a depository participant?
A depository is an account where stocks and shares of investors are kept electronically. The people who work and manage these depositories are DPs (depository participants). You can relate a depository to a bank. The place where all the information about all the accounts is like a depository. The different branches that give to the individuals are the DPs. The two depositories in India are the NSDL and the CDSL.
Please checkout some reliable Trading/Demat brokers for NRI – PIO – OCI: