What is Demat Account & Benefits: AS Chakravarthy: Techincal Analysis

What is Demat Account & Benefits: AS Chakravarthy: Technical Analysis

Stock Market : AS Chakravarthy Technical Analysis Training Hyderabad

What is Demat Account?

Before 1996, Indian investors held their shares and securities in physically, in the form of Certificates. After that, it was the beginning of a new era of paperless trading, where-in instead of the investor taking physical possession of certificates; it was stored or held in an electronic form in a Dematerialized (or Demat) account.

The Demat account can be opened by the investor while registering with an investment broker (or sub-broker) and this Demat account no. can quoted for all transactions to enable electronic settlements of trades to take place. On opening the account, internet password and a transaction password is given for the transfers or purchases of securities.

When an investor buys a share today, it gets credited to the investor’s demat account in just 2 days.

Benefits and Advantages of Demat

  1. Easy and convenient way to hold securities.
  2. Safe and Immediate transfer of securities with reduced paper work.
  3. No stamp duty on transfer of securities and reduced transaction cost.
  4. Automatic credit into demat account for shares arising out of benefits like bonus, Rights issue, split, merger, etc.
  5. A Trader can work from anywhere (e.g. even from home) and a single demat account can hold investments in both equity and debt instruments.
  6. The bonus/right shares allotted to the investor will be immediately credited into his account.There is no risk due to loss on account of fire, theft or mutilation.

For example: delivery failures caused by signature mismatch, postal delays and loss of certificate during transit. Further, it eliminates the risks associated with forgery and due to damaged stock certificates.

Disadvantages of Demat

  1. There is no provision to close a Demat account, which is having illiquid shares. The investor cannot close the account and he and his successors have to go on paying the charges to the participant, like annual folio charges etc.
  2. After liquidating the holdings, many Indian investors don’t close their DP account.They are unaware that DPs charge even on dormant accounts.

Documents Required for Demat Account

To open a Demat account, you have to provide documents which fulfill the requirements of KYC (Know Your Customer) norms. You have to sign a contract with Stock broker. Generally the documents are

1. PAN (Compulsory).

  1. Aadhar Card. 3. Bank statement (last 3 months).
  2. Address Proof.
  3. Two colour photos.
  4. Cancelled Bank crossed Cheque.

AS Chakravarthy NCFM Academy is the ultimate in Stock Market Courses Technical Analysis training in Hyderabad, Ameerpet, Telangana.

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A S Chakravarthy NCFM Academy Hyderabad is reputed for its training delivery standards in the NISM & NCFM Classes in Hyderabad and most popular for Financial Markets, Capital Market, Derivative Market, Currency Market, Commodity Market, Fundamental Analysis and Technical Analysis Coaching in Hyderabad for Share Markets. a s chakravarthy NCFM Academy Hyderabad has imparted training to hundreds of batches and thousands of students since its inception and is considered to be monopoly institute in providing Mutual Fund Distribution Module NISM-Series 5-A, and NCFM Course Training in Hyderabad and The Oldest Institute Training on Stock Market Technical Analysis in Hyderabad Telangana for Trading & Investment : Skills, knowledge and career oriented practical training guidance to students, professionals and corporate organizations in Hyderabad. Especially his Technical Analysis Institute in Hyderabad for Professional Trading.