Any company that is listed on the Indian stock exchanged is obliged to list shares in physical and dematerialized form. The physical securities are the actual shares that provide information about an owner where dematerialized is the procedure where the physical shares are converted on to electronic format. Once the shares are converted they are saved on to the best Demat account in India. Let us understand in details about the modus operandi of a Demat account.
Before you are planning to open a Demat account you have to be familiar with the technical terms. DP and depository are the two major terms that you have to be familiar with when you are opening this account. In India there are a couple of SEBI registered depositories, they are NSDL and CSDL.
Things to keep in mind when you are opening a Demat account
- In order for the Demat account to be opened, it is going to take 7 to 10 days
- When you are opening a Demat account you have to add a beneficiary
- Even it is possible to open more than a single Demat account with various DPS
- To open a Demat account there is no minimum share balance that is needed.
The charges needed to be opening a Demat account
Once you are aware that you need to open a Demat account for trading in shares you need to be aware of the charges. The DP is going to send you the agreement copy that enlists the terms along with conditions, applicable charges along with rules and regulations. For opening an account most DP is not going to levy and charge but they do have a fixed or a refundable charge.
You have to shell out maintenance fees, transaction charges or conversion fees if you are planning to convert your shares from physical into electronic form.
The benefits associated with a Demat account
The list of opening a Demat account are numerous. They are as follows
- Be it any security in the form of shares, debentures or bonds it can be stored in an electronic form
- As compared to physical securities the cost of a transaction is a lot less with a Demat account
- With a Demat account it becomes easy and secure for an investor to undertake online transactions
- No form of restriction occurs as far as buying or selling of shares is concerned
- There are certain risks associated with the physical security of shares like theft, forgery, etc. When you are holding the shares in an electronic form all these risks are a thing of the past
- The investment portfolio liquidity is enhanced
- With the help of a Demat account, you can conveniently go on to make electronic settlements
By now you might be aware of the various benefits of a Demat account. If you do not have one it is the right time to opt for one. The depositories go on to hold your electronic securities as you can conduct the transactions via them.