What is Demat account? How to open Demat Account free [Full Guide To Open A Demat Account]

What is Demat Account? You must have heard about the Demat account sometime. But you don't know much about it. If you want complete information about Demat accounts, then read this article completely. 

Demat account


What is Demat Account?

Actually, the Demat account is used to exchange shares of companies. When there was no Demat account facility, shares were given through hard copy papers. But everything is going digital. So the share market has also started to operate digitally.

People buy shares from different companies through the Demat account. And just as money is saved in the bank account, similarly the shares are also saved in the Demat account.

It is not that you can only buy shares. You can sell shares directly online. And nowadays it has become very easy. And the most important thing is that in this whole process you have to do everything online. Through this, people have built their business in the stock/share market.

In other words, putting shares digitally saved online is called Demat. The full meaning is "Dematerialize". 

Before the Demat account was invented when people bought shares, the company used to give them some documents. In which there was all the evidence that at what price the shares were bought. And whenever the shares were sold again to the company, the documents were given back to the company. The company then verified the documents by stating how much the shares were purchased and what the price is currently. 

So all this process used to take a lot of time. Hence the Demat account was invented. With this help, all the work gets done easily and time is also saved. And it's a safe way.

You have nothing to do, you open your account, you will get a username and password, with the help of which you can operate the account successfully. And nowadays the account can be opened on a mobile phone only. You don't need to go anywhere.


How to open a Demat account?

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A lot of apps will be available for opening a Demat account. Those old and popular companies take money to open a Demat account. But there are also many new companies that open Demat accounts for free such as Upstox. 

If you want to open your account on a platform like Zerodha, then you have to pay at least 300 rupees. Opening an account on these has become very easy. You have to get a simple verification done. 

And you will get an agent for document verification, who will charge you something. I will tell you the whole process of this, but if you want to open an account on Upstox, you can open it yourself easily. 

How to open a Demat account on Zerodha?

Before opening an account with Zerodha, know what documents will be required. The list of documents is given below.

Keep in mind that photocopies of all the documents are ready. 

  • Pan Card
  • Aadhaar Card
  • Two Passport Size Photos
  • Cancelled cheque/saving Bank Account PassBook

Process

Follow all the steps to open a Demat account. 

#1. First, go to Zerodha's website. And fill your details.

#2. After this, you will be asked for payment. You have to pay about 300 rupees.

#3. You will then get a call from Zerodha's agent, who will come to your address to collect your signature and the rest of the documents. 

#4. Your account will be started after 5-7 days of submission of documents.


How much money does it take to open a Demat account?

You don't need to spend a lot of money to open a Demat account. If you open an account with any company, you will have to spend Rs 300-700. It depends on the company.

But there are also some companies that open Demat accounts for free. And I would advise you to open a free Demat account. Upstox is a very safe way to open a free Demat account.

Many companies also charge account management fees which they charge every month. This is called annual management fee. 

Transaction fees: When shares are sent from one account to another, the company charges it. The fee will be charged according to the number of shares. 

If you have started a new business in the share market, then you should consult a broker before investing.

PAN card is most important to open an account. You can also open an account from their office.

Benefits of Demat account

1. The biggest advantage of a Demat account is that all the shares you buy are completely safe and there is no fear of theft.

2. If you want to invest in the offline stock market, then you have to buy a lot of shares. But online, you can also do business by buying small quantities of shares. In this, you can also deal with only one share.

3. In earlier times it took a long time to transfer shares. Sometimes it used to take more than a month. But through Damat accounts this work is done in a very short time.

FAQ About Demat Account

Q. Can I name my Demat account to someone else?
A. No, You cannot name your Demat account to anyone else. You can only transfer your shares to someone if they also have a Demat account.

Q. How many Demat accounts can I keep together?
A. You can have three Demat accounts in one company.

Q. Which documents should be required to open a Demat account?
A. It is very important to have a PAN card to open a Demat account. Apart from this, the documents given below are also required.
  • Voter ID
  • Passport Size Photo
  • Ration card
  • Driving License
  • phone Bills
  • Electricity bills
Before investing in the stock market, get to know about it well. If you are opening a Demat account only for some online offers and you don't have to work in the share market then don't open the account. Because accounts opened for free also start charging money after some time.

I feel that you may have got a lot of help with this, yet if you have any question in your mind, please comment. If I can do some help, I will definitely do it.

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