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How to Apply for a Demat Account in any Bank?
Demat Account
Image: Pixabay

How to Apply for a Demat Account in any Bank?

| @indiablooms | 24 Mar 2022, 12:17 pm

While it is not typically 'mandatory' for you to have a Demat or dematerialization account to buy mutual fund shares - but you have to know that there are quite a lot of benefits to having one. It lets you buy mutual funds or shares just through an electronic transfer of funds without the assistance of a broker. It also ensures that you would not have to hold your physical fund certificate when redeeming shares. But - before that, let us get to know what a Demat account really is.

 

What exactly is a Demat account?

When you are new to the entrant of security trading - you would know quite little about the Demat account. But, you had mostly heard about a time when securities were held physically in the form of sheets and certificates of paper. Could you even imagine how that would have turned up now? It would be a realm of millions and millions of paper that is spread across investors while they hold on to stocks.

In simple terms - a Demat account is an electronic account that holds your securities such as stocks, shares, bonds, and more - just in electronic form. This makes sure we are in the paperless era - don't you think? Investors today can easily hold their stocks and funds in electronic form - just in a Demat account. So, are you ready to get yours? We can get through with this in no time. It is never hard just to get a free Demat account opening online form and get started; just read through this.

How to Open a Demat Account?

We all need a medium to get to where we want to. You can open a Demat account in varied places. Let's look at how.

Step 1: Start to Apply Online

You could open your free Demat account through applications or portals - and submit your mobile number with your email address.

Step 2: KYC

KYC (Know Your Client) and this criteria must be completed in order to register with the DP and get your free Demat account online. You would have to submit your KYC info via the website or the mobile application.

Step 3: Verify your Documents' Legitimacy

Once you've provided your KYC information online - your DP client will double-check it to ensure complete transparency.

Step 4: Get Beneficiary Owner Identity

The DP will assign you the unique 16-digit Demat account number (BOID) after processing your application. You will have successfully opened a free Demat account once you receive your BOID.

Things to Remember

Well - there are quite a few things that you would need to keep in mind in order to open your Demat account. You need to have the following documents in hand.

The paperwork required to start a Demat account is low. This makes it easy for new candidates to see the procedure through from beginning to end without any complications.

 

  • The Documents Required:-

PAN copy

Address proof:

Voter ID

House agreement

License

Passport

Aadhaar

And more

Bank Account

Income proof

  • Link your Demat and trading account.
  • Make sure you know all your Demat account charges.
  • Submit and update the right details.
  • Also, file your nomination.

Why do you need a Demat account?

Apart from just being the medium to hold your securities - the Demat account does play a lot of other roles. They are mentioned here for you:

It is safe: You don't have to worry about dealing with falsified or phony share certificates when you have a Demat account. Each record of shares in your account is authentic.

It is easy: Properly storing and maintaining physical share certificates can be time-consuming. There is also the possibility of your certifications being lost or damaged. All of these concerns are resolved by opening a Demat account.

You can access it easily: Because all records related to a Demat account are online and electronic, you can access them at any time and from any location.

Charges: A Demat account eliminates additional expenditures such as handling fees and stamp taxes that were previously paid on physical share certificates. This translates into cheaper costs and substantial savings.

Multi-used: A Demat account is useful for more than only the equities share market. It could also be utilized to store other types of electronic financial products, such as bonds, mutual funds, and debt securities. This allows you to track and monitor all of your investments from a single platform.

Mutual Funds through your Demat Account

Prior to the Internet and widespread use of personal computers, investors received physical certificates for the stocks and other investments they acquired, as already said. However, as data becomes more computerized, investors can now utilize a DEMAT account to replace the need for physical certificates. Investors can buy, hold, and sell mutual funds online using electronic bookkeeping.

While a broker may approach a client with the offer of managing a mutual fund account, the DEMAT account provides the investor with an additional alternative.

For investors who prefer to manage their own accounts, the web portal can facilitate fund review, selection, and comparison.

Conclusion

Are you still waiting for a sign to open your Demat account? You don't have to anymore now that you know how to get it done. It is simple, and you can open your Demat account in just 5 minutes without having to go anywhere.

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