You must have heard about Demat accounts if you invest in shares, bonds or any securities. A Demat account is like a bank account that electronically handles all your bonds documents and papers.
When you buy shares physically, you receive a certificate, but when you buy shares on an online platform, your entry will be saved in electronic form, which gets saved in your Demat account.
A Demat account is necessary if you want to invest in BSE, NSE or any other securities.
There are three types of Demat account-
- Regular Demat Account
- Repatriable Demat Account
- Non- repatriable Demat account
These are the three types of Demat accounts. If you want to invest in shares or bonds, you should know about types of Demat accounts. Understand all types of Demat accounts to see which is best for you.
1. Regular Demat Account
People who live in India need a regular Demat account to trade or invest in stocks. If you want to invest in equity shares, you should have a regular Demat account.
When investors buy the shares, they get saved in an electronic format in the regular Demat account. You can open a regular Demat account if you want to invest in shares that do have an expiry date.
You do not need a regular Demat account if you want to invest in options and the future.
2. Repatriable Demat Account
Investors can open a repatriable Demat account if they want to transfer wealth abroad. This Demat account is for non-residents of India.
Repatriable Demat accounts need a non-residential external (NRE) bank account. If the Indian investor becomes NRI, he has to close his regular Demat account. They can shift their shares to non-resident Demat accounts.
3. Non-repatriable Demat Account
It is somewhere as a repatriable Demat account. You should be non-resident Indian (NRIs) to open a non-repatriable Demat account. Your account should also be linked to the non-resident ordinary Demat account.
But, the difference in that Demat account is you cannot transfer funds in this account from a regular Demat account.
Conclusion
If you want to invest in the stock market, you should have a Demat account. These are three types of accounts, and every Demat account has a different role.
If you are a resident of India, you should open a regular Demat account. You can open a repatriable or non-repatriable Demat account if you are NRI.
