Where to Open a Demat Account? – A Comprehensive Guide

“Where to open a Demat Account?” is the most obvious question to cross your mind if you are looking forward to opening your first Demat Account.

In this article, I will provide you with a comprehensive explanation of a Demat Account, covering all the essential aspects of the Demat Account’s history, meaning choosing the right broker, and a step-by-step guide on the Demat Account opening process.

What is a Demat Account?

Demat Account was introduced in India in 1999 to eliminate physical certificates and other paperwork relating to stock purchases since physical certificates could be lost, damaged, or stolen. A Demat Account holds Stocks, Mutual Funds, ETFs, and Bonds in an electronic format in the stock market.

Every Demat Account has a DP ID and a unique Demat Account Number. Besides, you can have multiple Demat Accounts to buy and sell in the securities market.

Here are some of the benefits of using a Demat Account:

• No paperwork; it saves you a lot of time.
• No worries about physical certificates being lost, damaged, or stolen.
• Buying and selling got way faster than before with high liquidity.
• Ease of storing and transferring securities.
• Better overview with excellent data visualizations.
• Faster access to your securities from anywhere.
• Legal formalities, such as adding a nominee, can be completed in minutes.

How to Choose the Right Broker to Open a Demat Account Online:

There has been a rapid increase in the number of discount brokers in India since 2010. However, choosing the right stock broker can be challenging. You have to consider several factors to choose the right broker.

Brokerage Fee and Other Charges:

Charges include Account Opening Charges, Demat Account Annual Maintenance charges (AMC), and Brokerage Charges. Interestingly, while most brokers charge an Account Opening fee and AMC, some brokers offer zero brokerage demat accounts.

When it comes to brokerage charges, you must compare the various brokers and see which discount broker has the lowest brokerage charges for the segment you are interested in. While most brokers these days are discount brokers running on a nominal brokerage structure, some of them also offer a zero-brokerage plan.

Account features and services offered:

You must ensure that the broker you choose has all the features you need. Besides, you can compare and see if any broker has any advanced features that can be helpful to you. Some of the features to look for are:

• User-friendly Interface
• Market News and Overview
• Fundamental Analysis Data
• Multiple Watchlists
• Advanced Charting Tools: Tradingview and ChartIQ
• Multiple Order types, such as GTT, BO, CO, and AMO
• Sensibull Integration
• Reports

Online trading platform and mobile app availability:

Before choosing a broker, you must ensure that the broker has highly usable web and mobile applications. You can try out every broker’s application to familiarize yourself with its interface and performance before starting to trade on the platform.

While trying out every broker’s application may not be possible, you can undoubtedly find the pros and cons by going through various online reviews on any broker.

Customer Support:

Customer Support is also crucial when choosing an online broker because you may encounter technical issues while using a trading app. Good customer support should be easily reachable and help you quickly break out of an issue. Hence, you must look for a broker with comprehensive customer support.

It’s important to understand that while some brokers offer comprehensive customer support through live chat, phone, and tickets, others may provide support limited to tickets or phone support.

Brand reputation and reliability:

It’s always wise to choose a broker that many traders and investors count on for its reliability. However, you must also find out the reasons behind its reliability. Besides, you must check the broker’s track record and see if it has had any glitches in the recent past.

Popular Demat Account Providers in India:

How to Open a Demat Account Online?

Opening a Demat Account is easy and will take 15 to 20 minutes of your precious time. Here are the steps you need to follow:

Choose a Demat Account provider:

You can begin by choosing the Demat Account provider, meaning a broker, which has the features you are looking for and is also affordable. Besides, you must select a reliable broker with no major issues in the past. Once you find one, you can open a Demat Account with it.

Fill Out the Account Opening  Form.

After you find a suitable broker for your trading and investing needs, you can go to its official website and start the signup process. Usually, for most brokers, you have to start by entering your mobile number and completing the OTP verification.

In addition, you have to share your email ID for all future email communications and verify it using the email link. Afterward, you must fill out the account opening form, entering personal details such as name, occupation, address, trading experience, and more.

Submit the Required Documents:

Once you fill out the application form, you will need to share details for the required documents and upload soft copies. Most brokers prefer PAN Card and Aadhaar Card for KYC. You can complete the KYC by giving the broker access to your DigiLocker account.

After KYC, you must also link your bank account for deposits and withdrawals. The process of linking a bank account is pretty simple. You only need to specify your bank account number and IFSC.

Next, you must complete the IPV or In-Person Verification Process, taking a live selfie of yourself using your device camera and uploading it to the broker’s website.

E-Sign Your Application

After you complete the KYC and IPV, you proceed with the E-Sign process. As you continue, you will be redirected to the Depository Participant, CDSL (Central Depository Services Limited) or NSDL (National Securities Depository Limited) website, where you can E-Sign your application using your Aadhaar’s OTP verification.

After completing the verification, you can click the Submit button to submit your application. Once submitted, you should get your Demat Account credentials to your registered email account within 24 hours.

Fund your account.

Once you have the credentials, you can log into your Demat Account. However, to buy securities, you will need to deposit funds in your demat Account. You can use net banking or UPI method to transfer funds from your savings account to your demat Account. You can buy shares or other securities after the funds are reflected in your demat Account.

Conclusion

Opening a Demat Account should be easy for you now that you have read this article. I have walked you through all the crucial aspects of a Demat Account. Even though selecting the right broker can be challenging, it shouldn’t be difficult for you anymore as long as you bear in mind the factors I mentioned in this article.

Opening a Demat Account is relatively easy, too, with our step-by-step guide. You can confidently open a Demat Account with the right broker now.

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Suresh KP

Founder at Myinvestmentideas.com

Suresh KP is a seasoned financial expert with over 20 years of experience. He is NISM Certified Investment Adviser and Research Analyst. For more about his expertise and certifications, visit About Suresh KP

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