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Experience Full Service Benefits

  • Research: Sharekhan Research ensures that you are always covered, regardless of asset class and trading/investing style
  • 650+ experienced Relationship Managers: Service Assistance, guidance, actionable market updates and research-backed clarity during volatility
  • Quality Service: Right balance of “brick” and “click” – Physical presence in 541 cities through 3,000+ franchisees.
  • Free Dial-N-Trade: Facility to place trading orders via telephone!
  • Platforms to serve every need: Platforms built to give you a simple, seamless experience – App | Web | TradeTiger
  • Pedigreed: Sharekhan has a 20-year pedigree and is backed by the BNP Paribas Group
  • ZERO account-opening charges: Open demat account with Sharekhan at ZERO cost*
  • Customisable pricing plans: With a Sharekhan demat & trading account, you get flexible pricing for equity trading as well as financial investments
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Open Free* Demat and Trading Account

Welcome to Sharekhan

Welcome to Sharekhan

Best Performing Retail Member

at NSE Market Achievers Awards 2018

2 Million+

Customers all over India

This figures are as on May 2021. Such representations are not indicative of future result

With Sharekhan comes the strength of the BNP Paribas Group

In India

162 years

Net Income@

EUR 8.2 Bn

@As per results published for year ending Dec 31, 2020

Presence

71 countries

Why Open Demat Account with Sharekhan?

Experience Full Service Investing

Sharekhan Research

Sharekhan Research

Back your direct stock buying and Mutual Fund investment decisions with our 20 years of unique research backed by Sharekhan Research philosophy.

Tested & Trusted Technology

Tested & Trusted Technology

One of the pioneers of online trading in India brings you reliable online platforms built by traders who code

True Value Relationship Managers

Relationship Managers

Guidance, careful monitoring and service because you will not always have the time to stay on top of your investments.

Wide assortment of Investment Services

Wide assortment of Investment Services

Equipped with a wide range of PMS, MF products and services, we help you pick the right product for your investment and trading requirements.

600 + Cities + Complete Market Hour Service + Free Dial n Trade

600+Cities + Complete Market Hour Service + Free Dial-N-Trade

You can rely on us for your investment needs and requests. Reach out to us through our online or offline channels.

Simplied Pricing

Simplified Pricing

No two customer's requirements are the same, that's why our prices are made to tailor every investor's and trader's needs.

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Our Demat account Opening Process

Fill in your basic personal details

Fill in your basic personal details

Upload a few documents that are required to open a Demat & Trading account

Upload a few documents that are required to open a Demat & Trading account

The Demat & Trading account is activated post verification

The Demat & Trading account is activated post verification

FAQs ON DEMAT ACCOUNT

Before 1996 in India, shares were bought, stored, and sold in their paper format as share certificates. The National Securities Depository Limited was set up and digitized share trading. Shares were traded in their electronic format, also known as dematerialized shares. Here is where demat account got introduced. A demat account enables investors to buy and store equity investments in their electronic dematerialized format.

The Securities and Exchange Board of India (SEBI) has made it imperative to open a demat account for any investor who wishes to trade and invest in equity-related investments. Digitization has led to the further diversification of investment options, and a demat account can also be used to store government securities, bonds, mutual funds, and Exchange Traded Funds (ETF).

A demat account is like a bank account. Money is held in an electronic format in a bank account, and electronic entries are made in the bank passbook. Similarly, shares and other equity-investments are held in their dematerialized form in a demat account, and the credit (buying of securities) and debit (selling of securities) is reflected accordingly in the Statement of Accounts. It is not compulsory to have any balance of shares while opening a demat account. You maintain Zero balance in a demat account.

Investing in shares is streamlined and safe with a demat account. Dematerialization of the shares enhances their ease of handling and accessibility.

TYPES OF DEMAT ACCOUNTS -

1.Regular Demat Account –This account is only for the residents of India who wish to trade in online Equity investments.

2.Repatriable Demat Account –This account is for Non-Resident Indians to trade in the global market. The NRI needs to open an NRE bank account to facilitate the transfer of funds abroad.

3.Non- repatriable Demat Account –This account is for an NRI to trade in online securities without transferring funds abroad. This demat account needs an NRO bank account linked to it.

BENEFITS OF HAVING A DEMAT ACCOUNT -

1.Shares certificates in their paper format carried risks of loss, damage, etc. Demat account allows investors to hold shares in their electronic form and thus eliminates the risk of loss and damage of securities, also reducing the incidences of forgery and theft of paper securities.

2.A demat account allows investors to easily access their investments, transaction history, statement of holdings at the click of a button.

3.Demat account eliminates the requirement of sending paper certificates to the Company or RTA for transfer, thus reducing costs, delays, and loss of documents. Demat accounts ensure a seamless buying, selling, and storage of shares online.

4.Demat account and online trading have eliminated the applicable stamp duty on transfer of shares. It has also removed other transactional costs.

5.Demat account ensures quick trade in equity investments with intra-day trading through online platforms. Investors personal details linked to every company stock and share can be changed through a single demat account, thus reducing the time taken to trade and manage securities.

6.Demat account has eliminated the restrictions on the selling of shares. It allows investors to sell shares even in odd lots.

7.A demat account, along with shares and stocks, also allows buying and storing of government securities, bonds, mutual funds, Exchange Traded Funds, etc.

HOW TO OPEN A DEMAT ACCOUNT?

1.Documents Required - Like opening a bank account, demat account opening requires a certain set of documents. Although these documents vary with different types of account.

Following are some of the documents needed to open a demat account –

a.It is compulsory for an investor to have a PAN card for opening a demat account.

b.An account opening form asks for the personal details and requires signatures of all the authorized holders of the demat account.

c.Passport size photographs of all the account holders for the account opening form.

d.Applicants must submit either Aadhar card, Voter ID, Passport or Driving License as Proof of Identity (PoI). Other government authorized identity proofs are also acceptable.

e.Either Passport, Voter ID, Driving License, Ration Card, Registered Lease/ Sale agreement of residence, Utility Bills (Electricity, Gas or Landline) or Bank account statement/passbook as Proof of Address (PoA).

f.It is imperative to submit an investor's proof of income or net worth if they want to invest in the commodities market or the derivatives. The appropriate documents are Form 16, IT acknowledgment, bank account statement for six months or a certificate provided by a verified CA that confirms the net worth.

g.A canceled cheque that bears bank account details like the investor's name, account number, IFSC Code, MICR Code, and bank and branch details is also required.

h.It is compulsory for NRI investors to appoint another person as a Power of Attorney to transact on their behalf.

2.The investor must approach a Depository Participant who is registered to open a Demat account and is linked to any one of the two Central Depositories – NSDL or CDSL. The DP verifies the documents and opens a Demat Accounts for the investor, which is linked to either the NSDL or CDSL.

3.The investor will be provided with the Demat Account number. This account number is a combination of the DP ID + investor's unique Client ID.

4.As the Investment broker, the DP will buy and sell the demat shares on the advice and request of the investor and hold these shares in the Demat Account. If an online trading account is linked to the Demat account, the shares can be bought and sold online.

5.The shares stored in the Demat account can be viewed through the Statement of Account.

Conclusion

Before 1996, securities investment was a lengthy and time-consuming procedure with cumbersome paperwork. Managing the paper securities was a hassle and very costly. Dematerialization of shares and availability of demat accounts has made trading in securities streamlined, seamless, and accessible for traders wanting to trade in a multitude of investment products.

A demat account offers a safe platform to trade in equity-related investments. Investing in equity is a highly profitable venture and thus attracts many investors. Not everyone is educated or trained in the intricate workings of the equity market and the demat account system. However, understanding your objectives and requirements and finding a service provider well suited to your need is essential. The DPs give the necessary knowledge, support to the investors, and help them realize their investment objectives.

WHAT IS A DEMAT ACCOUNT?

Due to the execution of various schemes for "Inclusive Banking," banks have now penetrated close to 99% of homes in India. Banks now provide all the necessary facilities, and everyone from the rural, illiterate population to the urban elite use banking facilities. As a result, most of us now know how a bank functions concerning our money. The way a bank is for your money, a demat account is for your electronic securities.

Before 1996, shares were traded and stored in a paper format called share certificates in India. The National Securities Depositories Limited was set up in 1996, and it became a central depository for the electronic format of shares. Share trading became online, and all the shares were traded in dematerialized form.

With the diversification of investment options, the dematerialized securities can be mutual funds, bonds, government securities, Exchange Traded Funds (ETF), etc. Demat account helps you to store all these types of securities in their electronic format.

WHY DO YOU NEED A DEMAT ACCOUNT?

In India, the Securities and Exchange Board of India is the top-most Authority for the regulation of share trading. It lays down that opening a Demat account is requisite if you want to buy and store shares in their dematerialized format.

Having a demat account ensures that the investor has a safe environment to trade in equity-related investments. Before 1996, share trading was a tedious and lengthy process with colossal paperwork. Managing the paper-based securities was a tiresome and costly affair. Dematerialization and the regulation of the electronic trading by both SEBI and the central depositories have made share trading seamless and accessible for every investor. The conversion of share certificates to electronic formats increases their ease of handling and accessibility.

A demat account has to be opened with a Depository Participant registered with either of the two central depositories in India. The two depositories are –

1.The National Securities Depository Limited (NSDL) promoted by the National Stock Exchange (NSE)

2.The Central Depositories Services Limited (CDSL) promoted by the Bombay Stock Exchange (BSE)

3.The DP needs to be authorized by the SEBI and should follow all the necessary regulations.

When you find the depository suitable for you, collect and submit duly filled and signed account opening form with all the requisite documents. After verifying the documents, the DP will open your account linked to either the NSDL or CDSL. You will be provided the copy of the agreement, schedule of charges, demat account number, and unique client ID. An online trading platform is also required to trade in shares online. The DP will provide the login credentials of these platforms.

The Depository Participant will purchase the electronic or dematerialized shares for you and maintain them in your Demat account. You can view them in the Statement of Holdings.

When the listed companies give out dividends or bonus, they get a list of their shareholders from the NSDL or the CDSL and thus credit the investor accounts.

WHAT ARE THE BENEFITS OF A DEMAT ACCOUNT?

1)LOWER RISK– Before 1996, possessing shares as paper certificates came with a lot of problems. The risks included loss of certificates, damage to the certificates, or misplacing them. The paper certificates also caused high incidences of theft and forgery. Dematerialization of shares eliminates all these threats and makes share trading a safer experience.

2)EASY TO HOLD – Having a demat account makes shares and their trading accessible. Investors can now easily trade in securities, view their transaction history, analyze their holdings, etc., at the click of a button. It also makes management and changing any personal details linked to the demat account easier. It is easy now to change the linked address, linked phone number, linked bank details, and any such account-related changes for every company stock from the comfort of one single demat account.

3)EASE OF TRADING – In case of paper share certificates, they have to be sent to the issuing company or the Registrar and Transfer Authority to get the ownership of shares transferred. This entailed a very costly procedure with delays and loss of certificates. With a demat account, you can transfer shares at the click of a button. Demat account has made share trading a seamless, streamlined, and cost-effective process.

4)REDUCED COSTS – If an investor wished to transfer physical share certificates, they had to pay stamp duty, making it a very cumbersome and costly procedure. Dematerialization of shares has ensured a smooth transfer of shares online, thus eliminating stamp duty and reduced other applicable transaction costs.

5)REDUCED TIME – Trading in shares through a demat account considerably reduces the time taken for buying and selling of stocks. Introduction of demat account and dematerialization of shares have introduced intra-day trading on online trading platforms. Investors can also change their registered personal details in all the stocks through the single point of a demat account. This has reduced the time taken to trade in securities and manage the portfolio.

6)ODD-LOT PROBLEM RESOLVED – Before the advent of demat accounts, there were various restrictions on the selling of shares. Traders could not sell their shares in odd-lots, which caused a lot of problems. However, trading through a demat account has eliminated all these restrictions. Shareholders can now sell their shares in any number with the click of a button from the comfort of their online accounts.

7)VARIETY OF INVESTMENTS – The investment options have diversified over the years and include options like mutual funds, government bonds, government securities, Exchange Traded Funds, etc. A demat account allows you to store all the different types of investments in their electronic format.

CONCLUSION

A demat account enables an investor to opt for a safe platform to trade in equities and diversify his investment portfolio. The Depository participants provide the requisite knowledge and support to these investors so that they can make a well-informed decision regarding their investment. The DPs help investors recognizing their investments goals and objectives, and find the perfect portfolio with the right mix of holdings. The central depositories, NSDL and CDSL, ensure a comprehensive database and records of all the investors in the country.

1.DOCUMENTS– Akin to opening a bank account, opening a demat account requires a specific set of documents. Although certain documents may vary based on the type of account to be opened, following are some of the basic documents needed to open a demat account –

a.PAN card – It is compulsory for an investor to have a PAN card for opening a demat account.

b.Duly filled demat account opening form with signatures – An account opening form asks for the personal details and requires signatures of all the authorized holders of the demat account.

c.Passport size photographs of all the account holders for the account opening form.

d.Proof of Identity – Applicants have to submit either Aadhar card, Voter ID, Passport or Driving License. Other government authorized identity proofs are also acceptable.

e.Proof of Address – Either Passport, Voter ID, Driving License, Ration Card, Registered Lease/ Sale agreement of residence, Utility Bills (Electricity, Gas or Landline) or Bank account statement/passbook.

f.Proof of Income – It is imperative to submit an investor’s proof of income or net worth if they want to invest in the commodities market or the derivatives. The admissible documents are Form 16, IT acknowledgement, bank account statement for 6 months or a certificate provided by a verified CA that confirms the net worth.

g.Bank Account details – A cancelled cheque that bears the investor’s name, account number, IFSC Code, MICR Code, and bank and branch details.

h.It is compulsory for NRI investors to appoint another person as a Power of Attorney to transact on their behalf.

2.VERIFICATION OF BROKER– A broker is your bridge to the share trading world. Hence it is imperative to check the credibility of your broker before opening your demat account with him. All brokers have to be registered with the Securities and Exchange Board of India (SEBI), which makes it easier to report and penalize fraudulent behavior.

3.DEPOSITORY PARTICIPANT- Depository Participants (DP) are authorized links between the Depositories and investors who are registered with the SEBI as facilitators of trade in equity investments and can trade securities through the Central depositories. Always inquire if your broker is a DP as it streamlines the demat transactions. As a DP, your broker is authorized to trade securities through the Central depositories, which means he can help you with demat related issues as well.

4.INQUIRY REGARDING BROKERAGE AND OTHER ACCOUNT-HANDLING CHARGES– Before opening a demat account with any broker, it is imperative to inquire and be aware of all the charges they levy on their services. Some of the costs that may be levied are-

a.One-time account opening charges

b.The transaction fee for every buys and sells done through the broker

c.The annual maintenance fee for the account

d.Conversion Fees

e.Charges for providing certain extra services.

You can keep track of all the charges levied by your broker in a monthly statement provided by him.

5.INQUIRY REGARDING OTHER SUPPORT SERVICES – Brokers provide a lot of additional support services apart from their primary roles. Always inquire about the kind of services a broker offers and choose someone well-suited to your requirements. A comprehensive set of support services, like regularly sending Statement of Account, providing research materials, regularly sending important communications, transparent charges, dedicated and responsive customer care department ensures that you have a safe, seamless and profitable trading experience.

6.REGULAR PROVISION OF RESEARCH AND ANALYSIS MATERIAL – Investing in equity is a game of extensive research and analysis. You need to understand the market sensibilities and make investment choices based upon your income, objectives and risk affinity. A good broker will regularly provide you with various research and analysis materials, like different reports, analysis of market experts, and technical data. This helps you in making educated choices and earning good profit.

7.GOOD TRADING PLATFORM – Just like Netbanking is for your bank account; a good online trading platform is for your demat account. It brings your equity investment at your fingertips. If you trade online, you can see the entire real-time bid and ask prices. Your transaction history and statement of holdings is easily accessible to you. A good trading platform also gives regular financial data for your analysis. It creates charts and graphs of your investments, thus making trading an interactive experience for you.

Investing in equity is a highly profitable venture and thus attracts many investors. Not everyone is educated or trained in the intricate workings of the equity market and the demat account system. However, understanding your objectives and requirements and finding a service provider well suited to your need is essential. Similarly, if you follow the laid down procedures and check off the list as mentioned above, you will have an educated, safe and seamless trading experience.

Account Opening Form -

  • Duly filled Demat Account Opening Form (Individual/Joint) along with KYC Application Form (Individual/Joint)

  • Photograph of each holder/signatory to be pasted on the form and signed across

Proof of Identity - POI (list of documents admissible)

  • PAN card with photograph (mandatory). Although there are a few exceptions to the PAN Card rule –

    • - Traders relating to specific income slab as per section 139A.
    • - Traders resident of Sikkim state.
    • - Transactions done on behalf of Central or State governments or by officials appointed by Indian courts.
  • The applicant should submit any one of the following:

    • - Unique Identification Number (UID) (Aadhaar)
    • - Passport
    • - Voters ID card - Valid Driving license
  • Identity card/ document with applicant’s Photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and Credit cards/Debit cards issued by Banks.

Proof of Address - POA (list of documents admissible)

  • Passport

  • Voters Identity Card

  • Ration Card

  • Registered Lease or Sale Agreement of Residence

  • Valid Driving License

  • Utility bills like Telephone Bill (only landline), Electricity bill or Gas bill - Not more than 3 months old.

  • Bank Account Statement/Passbook — Not more than 3 months old.

  • Proof of address issued by any of the following: Bank Managers of Scheduled Commercial Banks/Scheduled Co-Operative Bank/Multinational Foreign Banks/Gazetted Identity card/document with address, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities and Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members.

Other Documents

  • Bank Account Details – An original canceled cheque that bears your printed name, Account number, IFSC Code, MICR code, and Bank and Branch details.

  • It is requisite to provide proof of income or the applicant’s net worth if they want to invest in Derivatives (futures and stock) or the commodities market. This can be provided by either of the following documents –

    • - Form 16
    • - IT Acknowledgement Copy
    • - Bank statement for the last six months
    • - Stock Holding statement
    • - Certificate provided by a verified Chartered Accountant that confirms your net worth.
  • If the primary holder is a minor, then the account opening form should have the details of the parent or guardian along with their signature, personal information, and respective documents.

Account Opening Form -

  • Duly filled Demat Account Opening Form (Corporate) along with KYC Application Form (Corporate)

  • Photograph of each holder/signatory to be pasted on the form and signed across

Proof of Identity - POI (list of documents admissible)

  • PAN card copy of the corporate.

  • The applicant should submit any one of the following:

    • - Unique Identification Number (UID)
    • – Udyog Aadhar of the body corporate or Aadhar of all the signatories.
    • - Passport (of all the signatories)
    • - Voters ID card (of all the signatories)
    • - Valid Driving license (of all the signatories)
    • - Identity card/ document with applicant’s Photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and Credit cards/Debit cards issued by Banks.

Proof of Address – POA (list of documents admissible)

  • Document registered with Registrar of Companies along with the Copy challans of payments made to ROC.

  • Bank Statement not more than 3 months old along with an original cancelled cheque.

  • Registered copy of Leave & License agreement, self-attested (by authorized signatories as per Board Resolution)

  • Registered copy of Agreement for Sale, self-attested (by authorized signatories as per Board Resolution)

  • Copy of Telephone bill / Electricity, not more than 3 months old in the name of a body corporate, self-attested (by authorized signatories as per Board Resolution)

Additional documents to be obtained for Corporate over and above the Identity & Address proof:

  • Copy of the balance sheets in the name of a body corporate for the last 2 financial years (to be submitted every year)

  • Copy of latest shareholding pattern of the Body corporate including a list of all those holding control, either directly or indirectly, in the company in terms of SEBI Takeover Regulations, duly certified by the company secretary/Whole time director/MD (to be submitted every year)

  • Photograph, POI, POA, PAN and DIN numbers of whole time directors/two directors in charge of day to day operations.

  • Photograph, POI, POA, PAN of individual promoters holding control - either directly or indirectly.

  • Copies of the Memorandum and Articles of Association and Certificate of Incorporation.

  • Copy of the Board Resolution for investment in securities market.

  • Authorized signatories list with specimen signatures.

Other Documents

  • Bank Account Details - An original canceled cheque that bears the printed name of Body Corporate, Account number, Bank and Branch details, IFSC Code, and MICR code.

Account Opening Form -

  • Duly filled Demat Account Opening Form (Individual) along with KYC Application Form (Individual)

  • Photograph of each holder/signatory to be pasted on the form and signed across.

Proof of Identity (list of documents admissible)

  • Passport (mandatory)

  • PAN card with photograph (mandatory)

  • The applicant should submit any one of the following:

    • - Unique Identification Number (UID) (Aadhaar)
    • - Voters ID card
    • - Valid Driving license
  • Identity card/ document with applicant's Photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and Credit cards/Debit cards issued by Banks.

Proof of Address (list of documents admissible)

  • Passport (mandatory)

  • Voters Identity Card.

  • Ration Card

  • Registered Lease or Sale Agreement of Residence.

  • Valid Driving License.

  • Utility bills like Telephone Bill (only landline), Electricity bill or Gas bill - Not more than 3 months old.

  • Bank Account Statement/Passbook — Not more than 3 months old.

  • Proof of address issued by any of the following: Bank Managers of Scheduled Commercial Banks/Scheduled Co-Operative Bank/Multinational Foreign Banks/Gazetted Identity card/document with address, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities and Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members.

Additionally, the following also need to be explicitly obtained for NRIs:

  • Declaration that he/she has complied and will continue to comply with FEMA regulations.

  • Copy of the RBI approval letter, if any, for acquiring securities

  • RBI reference and date mentioned in the RBI approval letter should be entered according to whether the NRI/FN has ever purchased securities from the secondary market / has been allotted securities in the primary market / or does not hold any securities.

  • While processing De-materialization, receipt, delivery or pledge instructions from NRI Client, the DP must obtain a copy of the relevant RBI approval letter.

Other Documents

  • Bank Account Details – An original canceled cheque that bears your printed name, Account number, IFSC Code, MICR code, and Bank and Branch details.

Once an investor decides to trade in online equity shares and other investment options like mutual funds, bonds, government securities, and exchange-traded funds, he can approach a Depository Participant registered with either the NSDL or the CDSL. Once the documentation process is complete, the DP opens a Demat account for the investor, either with the NSDL or the CDSL.

The investor is provided with a Unique ID, your Demat account number. The total characters in every demat account number in India are 16; however, the format of the account number depends upon which central depository the account is opened with. In NSDL, the first two characters are alphabets determining the country the investor belong to (e.g., IN98765432123456 for India). For CDSL, every character is a numerical (e.g., 9876543212345678).

Every account number is a combination of the DP ID + investor's client ID. The client ID is unique to every investor and identifies their specific portfolio. The first 8 digits are the DP ID, which is the unique identification number provided to the Depository Participant by the Central Depository. The next 8 digits are the investor's client ID. So for the NSDL, IN987654 is the DP ID, and 32123456 is the client ID.

If they wish to start buying the securities, the investors may have to provide a cheque. The Depository Participant, now as the investment broker, will purchase the electronic or dematerialized shares for you and maintain them in your Demat account. The investor can view them in the Statement of Holdings. If the investor chooses an online platform, the holdings can be viewed online. Generally, the shares are credited by the DP on a T+2 basis, i.e., Trading Day + 2 days.

If the investor wishes to sell the shares, a delivery note with detailed information regarding the stock to be sold has to be given to the Depository Participant (DP). The DP will sell the respective shares, and the money will be credited to the investor. If the investor is using an online platform, the debit of shares and the credit of money are immediately visible in the account.

When the listed compnies give out the dividends or bonus, they get a list of their shareholders from the NSDL or the CSDL and thus credit the investor accounts.

1)LOWER RISK–Possessing shares in their paper format carries a lot of risks like loss, misplacing them, damage to the certificates, etc. Dematerialization of shares eliminates the risk of loss and damage to the securities. The paper certificates also had high incidences of forgery and theft. As the holdings are now in an electronic format, it has reduced the threat of forgery and theft.

2)EASY TO HOLD– A demat account makes equity trading and your shares accessible. You can trade in securities, view your holdings, transaction history, etc. at the click of a button. It also makes managing your details easy. You can make changes to your address, linked phone number, linked bank account, and such other account- related changes for every company stock all from your demat account.

3)EASE OF TRADING– Earlier, paper certificates had to be sent to the Company or the Registrar and Transfer authority to change the ownership of shares, which resulted in delays, additional costs and loss of certificates. With demat accounts; transfer of shares has become easier. Trading in shares, buying, storing, selling online has become seamless and streamlined.

4)REDUCED COSTS– Stamp duty applicable on transfer of physical shares, which was a cumbersome process for investors. Dematerialization of shares has eliminated the stamp duty and reduced all other transactional costs.

5)REDUCED TIME– A demat account minimizes the time taken to trade in equity investments. Buying and selling of shares is a quick process that can be done intra-day through an online trading platform. Similarly, changing personal details in your stocks can be done through a single demat account in which the shares are held. All this has reduced the time taken to trade in and manage securities for investors.

6)ODD-LOT PROBLEM RESOLVED– Earlier, there were multiple restrictions on the selling of shares. Shareholders could not sell shares in odd lots. Demat Accounts has eliminated those restrictions.

7)VARIETY OF INVESTMENTS- With the diversification of investment options, a demat account can store mutual funds, bonds, government securities, Exchange Traded Funds (ETF), etc.

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