Indian share markets have grown significantly over the decades. In the beginning, the users are fewer, but from time to time the traders and investors have grown up to millions.
One of the most necessary things to perform and transition or invest in is the Demat account. These accounts are different from ordinary bank accounts and can be used only for trading in stock markets.
The Demat account is the interlinking between your bank account and the share market. You can directly transfer funds from your bank to the share market.
Aims & Objectives Of Demat Account
It is necessary to have a valid Demat account for investing in the capital market. Because of several reasons, some of the aims and objectives of the Demat account are mentioned below:
- Security: The biggest aim and objective of the Demat account is to ensure the security of the traders or investors. Before the Demat account was introduced, all the records and share markets were based on physical transitions, which was risky. After the introduction of the Demat account, the market goes online, and cashless transitions.
- Cost efficiency: The Demat account makes it possible in fewer charges to invest or trade in capital markets. One needs to link their bank account to their Demat account and simply transfer funds to the capital market without any brokerage fees.
- Convenience: The introduction of Demat accounts make it easy for traders to invest in capital markets from their home. One can simply invest in digital form. He/She doesn’t need to carry cash to the stock exchange. Demat account eliminates human efforts and provides optimum convenience.
- Flexibility: The awareness of an opportunity might be the biggest loss in the life of an investor. But Demat accounts provide flexibility to the traders to know about all related news and information about the stocks, shares, and commodities.
Also Read: Top 5 Stock Market Trading Apps in India
Benefits Of Demat Account
- The possession in your Demat account can assist you to get passage to an assortment of financing alternatives from your banks.
- Demat accounts offer an optimum level of security to investors.
- Demat accounts make the process of loans from any bank in India easier. It will increase your credit score and allow you to take high capital loans at low interest.
- Demat accounts can be easily accessible from any part of the world. One can access it from multiple devices.
- Using a Demat account will eliminate the limitations. One can access and invest in any stock or share within a few seconds. Moreover, this facilitates to take quick actions, and use the opportunity timely.
Frequently Asked Questions
Who Can Open A Demat Account?
To open a demat account you need to be a citizen of India, and your age must be more than or equal to 18.
How To Open A Demat Account?
Several broker’s services and applications provide a facility to open Demat accounts for free. Moreover, online brokerage platforms like Zerodha, Groww app, and Upstox, also have facilities to open a demat account within the comfort of your home.
What Documents do We Need To Open A Demat Account?
And: To open a demat account some basic documents required are as follows:
– Proof Of Income (Eg: Copy of ITR Acknowledgement)
– PAN card
– Proof Of Address (Eg: Passport)
– Proof Of Identity (Eg: Driving license)
– Passport size photographs.
– Proof of Bank Account (Eg: Bank Statement or Cheque Book)