What is Demat Account Opening Form
Posted: Sep 12, 2017
In India shares are stored electronically in the demat account. When you trade online the shares are stored in the demat account. The two depositories in India are the CDSL and NSDL. They maintain the demat accounts.
To trade online you can open 2-in-1 demat and trading account. The demat account is used to store the shares and the trading account is used for trading. The demat account opening process is as follows
You have to first approach a depository participant (DP) like bank, broker or financial institution.
The DP will give you a demat account opening form.
You have to fill the form and submit it with the required documents. You have submit the physical shares too.
The DP will verify the form and the documents. The shares to be converted must be your name.
The DP will open and update the account.
The DP will give the account number to you. The account is also known as the Beneficiary Owners Identification Number (BO ID).
The physical shares are defaced once converted into the electronic form.
The online account is available to you in a few days.
Once you get a demat and trading account you can trade online. When you want to buy shares you have to tell your broker. The broker will credit the shares to your demat account. When you want to sell your shares you have give a delivery note to your broker with all the details. The broker will debit the shares from your demat account. The amount will be credited to your account.
There are many benefits of trading online. They are
You can buy and sell shares online with an online demat account without any paperwork
You can use high-end tools and software which are available for trading online. With a user friendly interface you can easily trade online.
You can trade anytime and anywhere using the internet
You can do fast transactions
The transaction cost is lower
You can trade online using a single account at multiple markets
The share are stored electronically so you not have to store the shares physically. There is no danger of theft.
The companies can easily do the disbursements of benefits like dividends and rights.
There are many online brokers offering the depository services. The features and the charges are different for different brokers. You can choose the broker for online demat account as per the services you require.
Sangeetha Menon works at a bank. Her work is to offer demat services to the customers. She guides her customer in opening the demat account. She issues the demat account opening form and checks the documents before opening a demat account.
Sometimes the smallest step in the right direction ends up being the biggest step of your life. Tip toe if you must, but take the step!