Things to consider before opening a Demat account

People have been dealing in the stock market for a long time but there have been many changes and advancements in the stock market dealing. Demat account is also one of such advancements. Earlier, there was no need of having such an account to buy and sell stocks but now SEBI has made it mandatory to have such an account if you want to participate in the stock market and buy and sell securities. However, a Demat account and a bank account are almost similar. Just like you hold your money in your bank account, in your Demat account, you will be holding your money as well as securities. While opening this account there are a lot of things that you need to consider or take care of. If you want to know about such things that you are required to take care of then you can continue reading this article.

You can refer to the points given below like the things that you are required to take care of or consider:

  • You need to ensure that you have chosen the same broker for your Demat account and trading: Nowadays, it is very common that all brokers open trading-cum-Demat accounts. There will be no issues. But you need to take care that your broker has a valid DP license. However, if your broker does not have such a license then at the time of selling your stocks, you will also be required to ensure the timely submission of debit instruction slip. Any delay caused can tend to make bad delivery and can also cause losses. But when you open your account with such a trader who is a DP as well, in simple words, when your DP and broker are the same, you won’t be required to get involved in the process of submitting the DIS and your stocks will be sold and bought on time. Because your broker will have the authority to debit and credit stocks from your Demat account. By ensuring this point, you will be able to prevent a lot of hassles and difficulties in your way of trading.
  • How robust is the Demat platform technology: Nowadays, you are able to open a Demat and trading account with the same broker. This has made transactions in the stock market seamless and efficient. However, you still need to ensure that you are opening your Demat account on such a platform that will provide you with seamless security transfers. If you have chosen an efficient platform then your account will be debited and credited instantly on buying and selling shares, there will be no delays.

These are a few points that you need to ensure or take care of while opening such an account. The 5paisa website provides a more detailed understanding of this topic. Furthermore, you also need to check the charges for the maintenance of a Demat account. There are many platforms having low Demat maintenance charges. Therefore, before you open a Demat account, you need to check the charges that you will be required to pay.

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