What is Demat Account ?

In the age of the Internet, where a large proportion of the population is attracted to invest their money in stocks, mutual funds or bonds, and many people are wondering about this, I am pretty sure you must have heard the term" Demat account" from people or friends next to you, and you might want to know about it too. Or maybe you are aware of it but don't know how to open a demat account online. So don't worry, after reading this post you will know everything related to demat accounts and how to open them online in a few simple steps. 

Also in this post, we have mentioned the top 10 broker sites through which you can easily open a demat account

So, Let's start with…

What is a Demat Account ?

The Demat account is a type of account that enables investors to hold their equities and financial securities electronically in it.it is also called a Dematerialized account. means converting or dematerializing your physical shares in the electronic format is known as holding a Demat Account. With a Demat account, you are capable to wield a wide variety of investments like bonds, equity shares, government securities, mutual funds, or exchange-traded funds. simply like a normal bank account, a Demat account is either credited or debited each time you buy or sell shares of a company.

Brief history of Demat account ?

In the early days of the stock market, the buying and selling of shares were done on papers and a certificate was issued to the people as proof. which makes the whole process a little difficult, and at the same time, there was a danger of the papers being lost, being counterfeit and at the same time, there was a danger of the papers being lost, forged or damaged.

And then in 1969 National Securities Depository Limited (NSDL) came into existence and it brought the concept of Demat account or Dematerialization through which all the physical shares are converted into electronic records and held in Demat account.

Benefits of Demat Accounts

There are many benefits of demat accounts, some of which are mentioned below:

1. Reduce the risk of getting lost or damaged. 

2. Stamp duty is not needed while transferring securities. 

3. Immediate and Fast transfer of securities. 

4. There are no TDS deductions for Demat accounts. 

5. Immediate and fast transfer of securities 

6. On-time monitoring through a smartphone. 

7. Information and statement of demat accounts are regularly sent to the customer.

8. And much more. 

*Eligibility- If you are a resident of India and your age is 18 years or more and you have a PAN card and address proof, then you are eligible for opening a Demat account.

Top 10 Demat account providers in India

Although there are many demat account providers in India, we have found for you the top 10 such account providers which are very much liked by the people, as well as they, meet the following parameters:

1. Low Brokerage

2. Easy Account Opening Process

3. Provides Mutual Fund Investments

4. For Beginners. 

5. Intraday Traders

6. Small Investors 

7. IPO Investment

8. Long Term Investment

And the list starts with:

SR No.             Name                           Rating

1                 Angel One                   9.6/10

2                  Zerodha                           9.2/10

3             Kotak securities                   9.2/10

4                   Groww                           9.0/10

5                   Upstox                           9.0/10

6            Motilal Oswal                   9.0/10

7            HDFC Securities                   8.9/10

8              ICICI Direct                   8.8/10

9               Edelweiss                   8.7/10

10                    IIFL                           8.4/10

How to open a Demat account online

Opening a Demat account in today's time is not a herculean task, there are many popular online broker sites in India like -Zerodha, Angelone, Motilal Oswal, upstox, Groww and many others, through whose website or application you can open your Demat account. but remember many of them have their brokerage charges. not every site provide you free Demat account opening.

Let me guide you through the step by step to open a Demat account.

Apply for a Demat account

To open a Demat account online. you must visit any of the above-mentioned broker sites or install and open their application. Then fill up the necessary credentials like phone number email, and address in the form.

Submit your KYC.

According to the new rules, it's mandatory to complete your KYC(know your client) to open a demat account. You can submit your KYC details on the website or in the mobile application. then move towards the next step.

Get Your Documents Verified

Once you have submitted your KYC details online, your Depositary participant's client will confirm your KYC details to ensure clarity.

Receive BOID (Beneficiary Owner Identity)

After processing your application and brokerage charges, you will receive a unique 16-digit account number (BOID) from the DP(depository participant). And this 16Digit number is your demat account number.

Once you get it then congratulations your demat account is successfully open

Summary:

In this post, we have learned that a Demat account is used to store shares, equities or bonds electronically. It has many advantages such as there is no risk of the document being fake, lost or damaged. There are many broker sites or banks in India that provide the facility of opening a demat account and there are also some who open an account with zero brokerage fees. Also, in this post, we have mentioned the top 10 such demat providers which are very popular and liked by the people, along with explained the steps through which you can easily open a demat account online.