Why Indians Love Demat Trading Accounts
Not too long ago, anyone with dreams of investing money in companies and trading stocks was stuck. Investing was only reserved for those in the uppermost echelons of India’s society – and if you were lucky enough to be one of those people, you still had to be a broker or physically visit the trading floor to participate.
However, that’s all changed. Today, investing in India’s many companies via stocks, or even joining the global stock market, is so much easier. And any ordinary person can do it.
If you’re interested in investing, you can do so right now. You don’t need to be a broker, have physical share certificates, or be part of the upper class. Absolutely anyone can start investing and trading stock in India today.
All you need is a demat trading account. With a demat trading account, you can securely trade stocks online, no matter where you’re located.
What Is a Demat Trading Account?
A demat account is similar to a bank account, but it has an entirely different purpose. Demat accounts are created especially for investors. They hold your shares of stock electronically, keeping them protected and secure.
When you purchase stocks and place them in a demat account, those stocks are dematerialized. This simply means that the physical shares of stock are converted into an electronic format. And your demat account number will be your security and proof of your ownership of those stocks.
As Religare Online¹ explains, a demat account acts like a bank account in many ways: it holds your money, and you’ll record transactions or entries in a bank passbook. And you can open a demat account with a zero balance of shares. When you trade and invest, your securities are handled electronically.
To open a demat account, Religare Online² explains that you’ll have two choices of depositories, either the National Securities Depositories Limited (NSDL) or the Central Depository Services Limited (CDSL), which can hold your stock shares. To get started, you’ll just need your PAN card, proof of identity, proof of residence, a cancelled cheque, and a photograph.
Why Do I Want a Demat Trading Account?
In order to easily participate in India’s stock market, a demat trading account is imperative.
Previously, investors and brokers needed to have their shares in physical form. But that involves a lot of paperwork, a lengthy verification process, and high security risks. A demat account, however, will eliminate all of these potential problems.
With a demat account, you’ll enjoy simple and seamless trading and investing globally and within India. And there are plenty of benefits that come with a demat trading account.
When you open a demat account, you’re immediately an investor – and all of your securities are available electronically. Investing, holding, monitoring, and trading all become easier, more convenient, and more affordable.
In addition to the greater convenience and electronic ease of trading and investing with a demat account, Angel Broking³ reports that you can also reap benefits like the following:
- Less Risk: When you hold physical securities, you’re at a high risk for loss, theft, or damage. A demat account completely eliminates these risks, keeping everything electronic.
- Easy Holding: There’s no need to keep track of your physical certificates’ performance with a demat account. You can conveniently store – and track – everything in a single account.
- More Flexibility: With physical certificates, there are limitations to how you can buy and sell stocks, as well as quantity rules. A demat account doesn’t have any of these restrictions.
- Lower Costs: With a demat trading account, you’ll enjoy lower trading and investing costs. There are no costs for physical certificates, like stamp duty and handling charges.
- Quicker Transactions: There’s no paperwork needed for your investments and trades with a demat account. That means you don’t need to worry about transactions taking a long time; they’re processed quickly.
Ultimately, a demat trading account is the easiest and most accessible way to join the stock market.
Which Demat Account Is Best?
Now that you know why demat accounts are important – and even beneficial – for Indians, it’s important to choose which account you’ll open carefully. There are a number of demat account choices available, but they aren’t all of equal quality.
To ensure you’re getting the best possible demat trading account for your investments, consider the following accounts. They’re some of the best demat account options available in India.
As one of the first brokerages in India to offer discounted broking, Zerodha is an excellent choice for demat trading accounts. It’s a brokerage that’s growing rapidly too – Good Returns⁴ reports that Zerodha is one of the fastest-growing in the country, and it’s offering new technology, an average daily trading turnover of Rs 10,000 crores, and the ability to instantly open demat accounts.
Backed by plenty of international investors with experience, Upstox has quickly become one of India’s largest brokerage firms – and its name is synonymous with low-cost investing and trading. According to Good Returns⁵, all stock investments traded with Upstox are free, with no brokerage charges. Once you open a demat account here, you’ll automatically have a trading account and get to choose which segments you’d like to trade in.
Considered one of India’s top financial services companies, ICICI Direct offers one of the best demat account options in the country. And a demat account is just one of the many stock trading services ICICI Direct offers. AS a sizeable company, ICICI Direct has a strong physical presence throughout India, and new, first-time investors will like that there’s no fuss over transferring funds or getting started.
You Can Begin Trading Stocks in India Today
Are you ready to join the global stock market? You can do so today – you simply need a demat trading account. With one of these accounts, you can participate in India’s stock market with ease.
Before you start trading, make sure to consider the best demat accounts available. Search for these accounts and compare their rates, their benefits, and what they can offer in terms of ease and security. With the right demat trading account, you’ll find investing and trading simple.