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What is DEMAT account - use and benefits


What is DEMAT account - use and benefits

What is Demat Account

In the stock market, you may often hear "Demat account." Learning what is Demat Account is vital for your journey in stock market. Demat account opening is the first step you take in the stock market. Demat account meaning in stock market is Dematerialized Account. If you are wondering what is Demat Account then, it is an electronic account that you open to trade securities and contracts in the stock market.


When a new person starts in the stock market, he often asks this question - what is Demat Account, and why is it essential for me? We saw the Demat account meaning in brief, but the benefits of having a Demat Account are many. First of all, your Demat Account is your secure digital Account to trade shares and securities. It does not matter if you are a buyer or a seller, Demat account meaning and its uses are the same for you.


Both buyers and sellers need a Demat account to keep track of all investments and provide a layer of security of their shares and digital assets. These shares or digital assets include shares of a company, Mutual Fund, Bonds, and exchange-traded funds.


Demat Account meaning, “an account that, through the dematerialization process, converts the physical shares and security on paper into digital”. This account can be opened with a Depository Participant or known as DP and with broker.


Benefits of Demat Account in India

  • Out of many benefits of Demat Account in India, the apparent use is " the conversion of paper shares into digital form." If you have to share papers with you, then keeping them safe and Secure for trading next time can be risky.

  • Having a Demat account does not only reduce the risk of paper share certificates but maintaining this Account can be very easy.

  • The benefits of Demat accounts in India include the protection against forgery, loss, and theft. You need not to worry about your investments because they are safe in your Demat Account.

  • 24/7 access is possible if you have a Demat account. The hours of stock markets are limited for opening and closing but having a Demat Account gives you the ability to access your investments online very easily at any time.

  • You can access your Demat Account from anywhere. You only need electronic devices like your smartphone, computer or laptop. or you need your smart tablet.

  • Flexibility to store multiple investment instruments such as shares, government securities, mutual funds, and bonds.

  • Like a bank account, your Demat Account offers you a nomination facility. In case of undesirable circumstances, when an investor meets his demise, all of the account investment is given to the nominee.


Besides all of these benefits of Demat Account in India, there are other benefits that you can know when you open your Demat Account.


Before knowing how to use a Demat Account for trading, you should know that Opening your Demat Account for share market is very important.


Open a Demat account for share market

  • Opening a Demat Account for share market is effortless if you follow the steps. You need an account opening form for Demat.

  • You need to type your basic details; name, contact number, email ID, residential address, and most importantly, your PAN number. You need to link Your PAN number to your Demat Account because it is crucial.

  • Also, it would be best if you linked your bank by adding your bank details in the form.

  • Then you need to provide all the documents of proof for your KYC verification. The above will verify your identity as well as your residential address.

  • You may need to record a short video clip of yourself to verify you are in-person details.

  • The next step would be to provide your electronic sign using your mobile number linked to your Aadhar Card.

  • Apply to your Account.

  • After you apply, you will be provided your credentials for login, which you can use to login to your Demat Account.

Steps - How to use a Demat Account for trading

  • After opening a Demat account for share market, you need to know how to use Demat Account for trading. Your Demat Account will already be linked to your bank account and trading account. The first step you do for anything else is transferring the bank account fund to your training account.

  • Once you have the funds in your trading account, you can begin buying shares and security from your trading account.

  • By using the funds from your trading account, you will pay for the shares and securities, and once your payment is successful, you will get your shares in your Demat Account in a couple of days.

So the above are the elementary steps about how to use Demat Account for trading. When you transfer funds from your bank account to your trading account and purchase shares and securities, both the Account; Demat Account and Trading Account work seamlessly.


The above basic steps are for buying shares and securities, but if you want to sell, you can use your trading account for placing a sell order in your stock exchange and begin selling the shares.


Having a Demat account in share market is necessary if you want to experience trade or exchange. A Demat account provides you with additional security and faster processing so that you can track your investment anywhere at any time.


You don't need to worry constantly about the updates as you will get all the updates on your smart devices like a smartphone or a computer once you learn about how to use demat Account for trading. You can also open more than one Demat Account if you want. But there are limitations as you are only allowed to open one Demat Account with your broker or DP. One broker gets you one Demat Account, and you should open your Demat Account with a broker for DP only if you are starting.

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