Open a Demat Account by fintotal


									Personal finance portal -

Procedure: Open a Demat Account


Demat, DP, Share Trading, Stock Trading, Trading,How To Open A Demat

Meta description:

 A step-by-step procedure to choose and open a suitable demat account

Step header:

Know About The Demat Account

Step Point:
1) DP or Demat or Dematerialised Account means that your shares are not held as physical
certificates. Just like your bank account balance is not held as physical cash in the locker
but simply as entries in the passbook, your shares are held as entries against your DP
2)     You     need      this  account    to   invest    in IPOs or    trade    in   shares
3) If you have any old physical shares, you might as well convert them into demat form as
soon                                        as                                      possible
4) You also need the Demat account to invest in certain bonds (such as infrastructure

Tool tip:

Step header:

Compare Providers

Step Point:
1) In case you only want to invest in bonds or funds and not in shares, you may not need a
trading        account       at        all.      a Demat account         would      suffice
2) Most providers offer both Demat and trading accounts, but you can choose to take them
from             different            providers           if            you           want
3) The fees for Demat accounts may include an opening charge, and an annual charge (of a
few hundred Rupees). Trading charges on the trading account are on a per trade basis
(typically 0.25% - 0.75%). You can compare both these to arrive at the best package

Tool tip:
If you are a new investor, you might as well take both from the same provider. This is for
your convenienceMany providers give the option of online and offline trading account, but
some don’t. Make sure you choose the one you are comfortable with

Step header:

Open Your Account

Step Point:
1) Once you call the sales person over, he will hand you a rather large form and a set of
documentation                                                                requirements
2) In some forms, Derivatives (Futures and Options) are combined with share trading. Make
sure     you    sign     here     only    if   you     want    to    trade     Derivatives
3) You need to give the account opening cheque and possibly another cheque that goes to
your trading account. This money is available for your first trade, and is call "margin"
4) Once the forms signed and documents given, the account gets opened in a week to 10
days. Thereafter, you can begin trading

Tool tip:
Account opening forms vary a bit between providers, but are uniformly painful and long. You
may need to sign at over a 100 places We would strongly urge new investors to stay away
from Derivatives for a long time

Step header:

Maintain Your Account
Step Point:
1) Demat accounts generally have an annual maintenance charge, irrespective of how
active you are in trading. This is usually a few hundred Rupees a year
2) Most providers send Demat statements once a quarter. This is separate from the trade
confirmation you get when you buy or sell shares

Tool tip:
Insist on a statement if you don't automatically get one. Go through it to see if it is accurate

To top