Can you believe that about 4.2 million demat accounts opened in India in December 2023?
The primary reason is that SEBI has made it compulsory to have a Demat account if you want to invest in the stock market.
Demat account stands for ‘Dematerialized account.’ This account holds your securities electronically. Thus, there’s no more mismanagement and tedious work of handling physical certificates of shares.
The best Demat account in India is similar to your bank account. The only difference is you don’t credit or debit money from here. Instead, you buy and sell securities from your demat account. You can do it online with a few clicks, and the transaction is made within seconds in a good demat account in India. Thus, a demat account makes transactions convenient for every investor.
Before opening a good demat account in India, it’s essential to understand its types.
Regular Demat Account
A regular demat account is the standard demat account used by any Indian. It is the best Demat account in India. With this account, you can hold or transact your securities electronically. This account helps with easy procedures for buying and selling stocks, mutual funds, and government securities.
Repatriable Demat Account
This type of demat account is usually used by Non-Resident Indians (NRIs). They use it to invest their funds in the Indian stock market and repatriate funds along with their earnings to their country of residence. With this account, they can easily transfer the funds abroad, including the principal amount and the profit.
Non-Repatriable Demat Account
Similar to the repatriable account, the non-repatriable demat account is also meant for NRIs, but with the restriction that funds cannot be repatriated abroad. However, NRIs can repatriate the dividends, interest, or capital gains earned on investments held in this account.
After knowing the types, let’s dig in to find out how to choose the best Demat account in India.
You cannot make a mistake here, as the demat account you choose will decide how far you will go with your investments. Hence, here are some important considerations you need to ensure while choosing the best Demat account in India.
Fees and Charges
Consider the account opening charges, annual maintenance fees, transaction charges, and other charges associated with the demat account. Compare the charges of different brokers and choose the one that suits your bill.
Ease of Use
You can now have a look at your demat account online through mobile applications. However, check that the application your provider offers is easy to use so you can get access to the details without anyone’s help. Moreover, if you trade frequently in the market, the app should provide easy navigation for efficient trades.
Customer Service
It may seem basic, but customer service is a crucial factor to consider before choosing your demat account agent. Check their reviews and ratings online. A good agent should be able to provide quick and efficient solutions to your problems. Since the market keeps fluctuating every second, you cannot wait for hours to get the solution.
Trading Platforms
Evaluate the trading platforms provided by the broker. A robust trading platform should offer features such as real-time market data, advanced charting tools, customizable watchlists, order types (market, limit, stop-loss, etc.), and seamless integration with research and analysis tools.
Research and Analysis Tools
Opt for brokers who provide access to fundamental and technical analysis tools, stock screeners, market news updates, and expert insights to help you make wiser decisions regarding your trading strategies and portfolio management.
To take complete advantage of your demat account, you need to know about its benefits.
Easy and Secure Holding of Securities
Electronic securities eliminate risks such as loss, theft, and damage, ensuring a streamlined and protected management process. This digital setup provides easy access to securities, real-time updates, and enhanced security measures, making the handling and tracking of investments more efficient and reliable.
Quick and Paperless Transactions
With a demat account, buying and selling securities has become quick and paperless. The electronic system eliminates the need for physical certificates and the hassle of handling paperwork. Just a few clicks, and your transactions are complete, making the process efficient and straightforward.
Reduction in Risk of Frauds and Forgeries
Electronic transactions conducted through demat accounts are protected by stringent security measures and authentication protocols. This reduces the risk of fraudulent activities such as unauthorized transfers, fake certificates, or identity theft.
A Basic Service Demat Account (BSDA) is a streamlined version of a regular demat account, designed to minimize demat charges for investors with smaller portfolios. SEBI introduced this facility in 2012 to make investing more accessible for those with modest investments.
To further promote participation from small investors, SEBI has recently raised the threshold for the BSDA from Rs 2 lakh to Rs 10 lakh. This adjustment, which will take effect on September 1, as outlined in SEBI's circular, is aimed at encouraging more small investors to engage in the securities market.
By increasing the limit on the value of securities held in a BSDA, SEBI hopes to stimulate trading among small investors and enhance their financial inclusion.
If you are someone willing to start investing in the Indian stock market, open a Demat account in India first. From the pool of brokers and agents, choose the one that provides you with maximum services at minimal rates, like Sharekhan. Once your demat account is opened, you’ll be surprised to see the ease it brings along while transacting in the market.
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