It is mandatory to have a Demat account to invest in the stock market. If you are also going to invest in the stock market, then first of all you will have to open a Demat account.
Let us tell you that the Demat account is a standardized electronic system. You can keep financial assets in this.
Under the Depository Act 1996, a Demat account has been made mandatory to ease the investment process in the stock market. You can keep digital copies of your shares or other securities safe in the Demat account.
Let us know how different is a demat account from a bank account.
How different is a demat account from a bank account?
The Demat account is electric. In this, financial assets (shares, bonds) are kept in place of cash.
Demat account is used for operative functions under the principle of dematerialization.
In the Demat account, digital shares are kept in place of physical share certificates.
A Demat account is used to collect all the shares of investors in one place.
How to open a demat account
You have to go to your broker's website.
After this, you will have to give other information like your name, mobile number, and place of residence to fill out the Lead Form.
After this you will have to enter the OTP received on your mobile number.
Now fill in the other necessary information like date of birth, PAN card details, and bank account to complete the KYC process.
In this way, your demat account will be opened.
Let us tell you that you will get all the information related to the Demat account by email and mobile number.
Let us tell you that an investor can open multiple demat accounts. This account can be opened with a single depository participant or multiple depository participants. However, the investor can use the demat account only when the KYC in his account is completely updated.
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