Why Every Indian Must Have A Demat Account Along With A Bank Account?November 6, 2020
Almost everyone owns a bank account in the form of a current account or savings account. However, the number of Demat account holders is far less. A Demat account holds your securities in electronic form and is primarily used for trading purposes.
You can earn substantial wealth by investing in stocks, mutual funds, derivatives, equities, etc. A Demat account lets you invest in these securities conveniently. Therefore, opening a Demat account can prove to be your first step towards understanding different financial instruments that will eventually help you achieve bigger financial gains.
Why is a Demat account useful?
- A Demat account not just holds your securities but also makes the process of buying, selling, and transferring stocks faster.
- A Demat account can be accessed by using a laptop, mobile phone, tablet, or any other internet-enabled device easily. This means that you can monitor your investments on the go by using a Demat account.
- With a Demat account, securities can be converted from physical to electronic form. You can even convert the electronic securities back into a physical format (rematerialization) with the assistance of your DP.
- Dividends, refunds, and interest gains are directly credited into your Demat account whenever your company offers it. Apart from that, activities like the splitting of stock, bonus issues, etc. reflect in your Demat account automatically.
Let’s understand how to open Demat account first:
- Nowadays, opening a Demat account is quite simple as you just need to get in touch with a registered broker who will guide you through the entire process. Many brokers/brokerage firms even have their own websites that can be used to fill and submit the Demat application form online.
- Once you fill the form and submit the necessary documents, you will be called by the broker for in-person verification. After that, the brokerage firm will let you know about the services and capital solutions that can be offered.
- If you are interested in partnering with the brokerage firm, you can sign the agreement containing the rules and guidelines laid down by the depository body. Now, you will get your Demat account number that can be used to access your Demat account online.
To trade seamlessly in multiple instruments you will need a trading account and the assistance of a registered broker. If you are experienced in trading then you can hire a discount broker who will charge a minimal Demat account opening charges and brokerage in exchange. If you are a newbie trader then you can go for the full-service brokers who offer advisory services, analytical tools, research reports, etc. apart from the regular services.
However, a full-service broker will charge a fixed percentage per trade as a brokerage commission. This means that a higher trade volume will result in a higher brokerage which will ultimately reduce your net profit. To get an opportunity to trade in MTFs, Mutual Funds, Derivatives, Equities, and other market solutions at an affordable subscription package, you can open a Bajaj Financial Securities Limited Demat Account. With BFSL Demat account, you can save big on brokerage costs as you have to pay a flat brokerage rate per trade irrespective of your trading volumes. You can trade easily in different financial instruments and participate in unlimited trading owing to its competitive pricing model. Flat brokerage fee of Rs. 0.99 on delivery trades, irrespective of the trading volume will help you to maximize your profits. Also, you will get a modern trading platform and a chance of working with an established player. Moreover, you can choose between professional and beginner trading packages as per your investment requirements.