In the last couple of years, the procedure of investment has seen a drastic change. With new technology, things have become more dynamic. Today, e-commerce is gradually becoming the preferred option and the same goes for the stock market. Managing your finances such as equity or debt can be a hassle, given the tasks you perform every day. Thankfully, the Depository Act of 1996 has made it easier for everyone to manage their financial securities with just a few clicks. Instead of receiving physical copies of shares or other securities, a Demat account helps you to leverage the benefits of an online trading platform where you hold your financial security on a standardized electronic system.
What is a Demat Account?
A Demat account is just like a bank account with the difference that it deals with stocks instead of cash, in electronic form. A Demat account uses the concept of dematerialization for its operative function. Dematerialization is the process in which physical share certificates are converted into electronic form. Accordingly, a Demat account uses this technology to store all the stocks of an investor under one roof: these include government securities, mutual funds, shares, bonds, etc.
How to Open Demat Account Online?
Here are the steps to open a Demat account online:
- Head to the official website of your preferred Depository Participant (Broker)
- Fill out the simple lead form asking for your name, phone number and city of residence. You will then receive an OTP on your registered mobile number.
- Enter the OTP to get to the next form. Fill in your KYC details such as date of birth, PAN card details, contact details, bank account details etc.
- Your demat account is now open! You will receive details such as Demat account number on your email and mobile.
An investor can have multiple Demat accounts, which can be with the same Depository Participants (DP), or with different DPs. As long as the investor can provide the required KYC details for all applications, multiple Demat accounts can be operated by an applicant.