Curiosity is the very nature of people, being curious about the stock market is very natural. Therefore, it is natural for people to look for how to invest in stocks, the first step being the demat account opening. No matter what the ultimate financial objective of a person is, a Demat account is a prerequisite for conducting any kind of transaction in the share market. The points given below highlight ‘how to open a Demat and trading account?’.
What is a Demat account?
Demat accounts, or dematerialized accounts, allow anyone to hold shares of a company electronically or rather virtually. A Demat account enables the holder to hold dematerialized securities such as stocks, mutual funds, exchange-traded funds (ETFs), bonds, etc.
When someone places an order for a stock, their shares are credited to their Demat account. Similarly, their Demat account is debited whenever they sell their shares.
How to Open a Demat Account?
According to SEBI or any other top Financial institution data, new Demat account additions rose to an all-time high of 10.7 million between the years 2020 and 2021.
Simply follow the following steps to Open a Demat account:
1. Visit the required website to Open a Demat Account.
2. Enter the essential details like the phone number and click on “Open account Now.”
3. The person creating the account will receive a verification code on the same number. Insert the code and click on the “Apply Now” button.
4. Next step includes: entering the email address and the verification code sent to the inbox of the person creating the demat account.
5. Enter the PAN number and date of birth, and click on “Proceed.”
6. Complete the E-KYC process after that.
7. Complete the Verification Procedure. This will require the uploading of a real-time selfie
8. E-sign the form to complete the procedure of opening the account.
Documents Essential for opening a Demat Account
● Any type of Identity proof (any one):
- Voter’s ID
- Aadhaar card
- PAN card
- Passport
- Driving license
● Address Proof (any one):
- Ration card
- Electricity bills
- Telephone bills
- Property tax receipts
- Passport
- Bank passbook
- Voter’s ID
- Aadhaar card
● Income Proof (any one):
- Photocopy of the Income Tax Return (ITR)
- Recent salary slip
- Bank A/C statement of the current bank
- Canceled personalized cheque.
Factors to be taken into account while Opening a Demat Account
1. Ease of Opening an Account
SEBI mandates a complete process to be followed by the service providers when creating any Demat account. However, one can simplify some aspects of the steps to open a Demat account.
2. User-Interface
Most brokers have the software that they have installed. one can find out which app has the best interface by performing some research or reading reviews.
3. Account opening charges
There are various charges associated with Demat accounts, including Annual Maintenance Charges (AMC), charges for physical and duplicate statements, and also the costs associated with dematerialization and rematerialization.
Conclusion
Now that one knows how to start a Demat account, one can create a free account using 5paisa. There are no brokerage fees, so there won’t be any payment for the demat account opening. Additionally, 5paisa has the best free Demat account on the market.
