Though investment in stocks is subjected to high risk, at times it pays off handsomely too. You only need to be smart and creative. The trick is to follow the lot or take some calculated risk and invest in shares that have a high resale value. This is where having a proper demat account lands as an advantage. Today, we will help you decide on the best demat account providers in India.
What is a Demat account?
Demat is the short form of dematerialized account. This kind of account is inevitable for individuals who deal in shares and other stock market activities. Its authorization is activated by SEBI (Securities and Exchange Board of India). It is quite different from your normal bank account as it only has to look after buying and selling of shares. The depository and depository participant are two important features of a demat account.
The depository in simple language is a provider of facility for holding securities in electronic form. It acts like a bank that keeps your money safe with the difference that depository holds your shares, debentures, bonds etc. Again, a depository participant is an agent hired by the depository to handle the demat account and other institutional participants like share brokers, financial institutions and banks.
How to open a demat account?
If you are new to the field you must know that as a depository, you are not permitted to open one without a depository participant. But, when it comes to demat accounts, you can open any number of it, as per your choice or based on the quality of services offered. A demat account in the name of joint holders can also be opened. However, it is restricted to three holders: ne main holder and two joint holders.
Minors too are eligible to open a demat account. The account only has to be operated by a guardian until he/she hits the right age. The father, mother or both can legally operate the demat account in the name of the minor. However, he/she is not fit to become a joint account holder.
Operating a demat account online
If you have a demat account, prefer online transactions. This will let you access your account from anywhere from anywhere in the world and also enable you to transact in stocks and shares listed on the stock exchange (Bombay Stock Exchange or National Stock Exchange). All you need to do is login and start trading.
Comparative analyses on the various demat account providers in India (2012):
In the table above you will notice that parameters like service charges and fees charged by various demat account providers while opening and maintaining a demat account is taken into consideration. If you feel that we missed out on something please feel free to share your views.
Deciding in the best demat account provider in India
If you consider the cost factor, I would suggest India Bulls. You may find the account opening charges to me higher, but trust me, in the long run it will prove your money worth. It offers free maintenance too. Again, if you consider the usability and quality service, Angel Broking is what I will ask you to go for.
Do not forget to carry your PAN card and a residence proof while opening a demat account. All the best!
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