Best Demat Account
Demat (Dematerialized) account is the need for trading in the Modern Era. If you are an investor or a trader with old trading techniques then you need to step up your trading method. The Dematerialized account minimizes the paperwork by holding the share and securities in electronic form.
With the rapidly increasing number of Indian Investors in the trading, the need for electronic trading is fulfilled by the pretty fast opening of the Demat account. A rapidly increasing number of Demat accounts has reached to 4 crores.
Choosing a Demat account to fulfill your needs is not an easy task. You need to consider many factors before opening a Demat account. You need to look at the following parameters before choosing the best Demat account in India.
- Opening cost of Demat account
- Ease of opening a Demat account
- The annual maintenance cost of a Demat account
- Transaction fees of a Demat account
- Brokerage charges of a Demat account
- Safety of Demat account
To open a Demat account you must have a PAN card, voter ID, Bank Passbook, telephone landline bill, electricity bill, driver’s license, passport, income tax returns, and ration card.
Types of Demat Account
The Demat account has the following three types.
Regular Demat account:
The regular Demat account aims to bring convenience to the citizens of India by making the trading operation easier. The electronic conversion of securities and shares completes the weekly process of trading in hours. The conversion of securities and shares eliminates the risk of theft, misplacements, and forgery, unlike physical shares. Regular Demat accounts in India are provided by the Depositories.
Depositories providing regular Demat account:
National Securities Depositories Limited (NSDL) holds the shares and securities such as bonds in electronic or physical form. It provides the services of Demat account through stockbrokers, depository participants or intermediaries.
CDSL (Central Depository Services Limited) is another Indian depository in Mumbai, providing central securities. It holds the shares and securities in physical or non-physical form. It provides the services of Demat account through stockbrokers, depository participants or intermediaries.
Repatriable Demat Account:
Are you an NRI (Non-residential Indian)? Are you looking for an account by which you can transfer funds from anywhere in the world? Repatriable Demat account makes your dream come true. Any transaction made through a repatriable Demat account will immediately reflect the Demat account. For opening a Demat account you must have NRO (Non-Residential ordinary) or NRE (Non-residential External) account.
If an NRI, though Indian residential or non-residential wants to open a Demat account, they must know and follow the rules of the FEMA (Foreign Exchange Management) Act.
For opening a Demat account you must have a copy of the following Indian Embassy attested documents:
- PAN card
- Rental or lease agreement
- Sale deed
- Passport size photograph
- FEMA declaration
Non-Repatriable Demat account:
Are you an NRI and facing difficulty in managing finance and repatriating money to your home account? Non-Repatriable Demat account solves your problem by providing you the facility to manage your accounts in different countries, transfer funds to your home account, and manage finance easily.
If an account holder wants to keep money in his/her account he can do this as per the guidelines specified by the bank. For example, some banks allow the account holder (non-residential) to keep the 5% of paid-up capital in an Indian company. In the case of leaving the country, your previously owned Demat account can be transferred to the NRO account including the shares and funds.
Best Demat account for beginners
When someone is taking initiative toward trading then he/she probably wants to start with the cheapest brokerage, trading assistance, advice, research, and stock recommendation. Hardly the Demat account providers will provide you with all of these services. However many support portals, online education apps, and discussion forums are available for beginners to assist them.
Zerodha is considered as the best Demat account for beginners but it will not provide any advisory, trading assistance, or stock recommendation.
If you are looking for a Demat account with low brokerage then choose 5paisa. It is a free and best Demat account for a mutual fund with no hidden fees. More providers of the best Demat account for mutual funds include ShareKhan, HDFC, Kotak Securities, and SBI, etc.
If you don’t know anything about trading or you have a short time to pay on trading then choose a Demat account with a full-service broker like Motilal Oswal. Motilal Oswal is the best full-service broker.
Best Demat account bank
This parameter of the Demat account is known for the safety and security of funds as the safety is extremely important while trading.
In this modern age, almost 80% of people have bank accounts. People open up a bank account for keeping their money safe, transferring, or receiving funds safely. Due to security, many people choose to invest in the stock market via the bank. Banks have gained the trust of people and now they feel that their money is safe for transferring the funds to the trading account.
Pros and cons of Demat account:
Pros of Demat Account:
- It is an easy way of sales and purchase of shares and securities.
- Maintenance of shares and securities is very easy.
- It eliminates paperwork.
- It reduces transaction costs.
- Investment can be held in the form of debt and equity.
- Trading can be done from anywhere.
- It gives the freedom to sell even a single share.
- It eliminates the worry of theft, fake securities, or bad delivery of securities.
Cons of Demat Account:
- You have to supervise the stockbroker as they are capable of manipulating the market.
- The securities and shares can become uncontrolled.
The adoption of the Demat account eliminates the troubles associated with the physical shares and paperwork and enables the electronic storing of shares and securities. The electronic storing of shares and securities makes their representation and maintenance easy. The Demat account has brought a significant change in trading, sales, and purchase of shares. As well as it eliminates the risk or theft associated with the paperwork.
You Must Also Read