If you are reading this blog, chances are you already know what a demat account is and why it’s important. In case you are not familiar, a savings bank account offers a simple analogy. In a savings bank account, you hold your cash and if you withdraw cash or make payments from your SB account, the cash is debited. Similarly, you need a demat account to hold shares or other securities electronically. If you sell the securities, it is debited from your demat account, if you buy them, it is credited to your demat account.
Why is opening a demat account important?
Simply, because you cannot buy or sell securities without a demat account. You need a functional demat AC to invest or trade in equities, derivatives, exchange traded funds (ETFs), bonds and debentures. You don’t need a demat account to invest in mutual funds but you can still hold your mutual fund units in a demat account.
How to open a demat account?
You need to approach a reliable SEBI – registered broker such as Angel Broking to open a demat account. The process is fast and simple. You just need to submit a few documents through e-KYC and meet the minimum eligibility requirements. However, before you open a demat account; you must be aware of a few important things.
So, here are the five important things to check about your broker or broking service before opening a demat account.
Types of brokerage
When you start hunting for the best brokers in India, remember that there are two types of brokerage firms: discount brokers and full-service brokers. A discount brokerage house will simply carry out your instructions and help you provide equity and derivative trading services.
On the other hand, a full-service broker provides seamless trading and investment opportunities in mutual funds, equities, options, futures, commodities, currency, IPOs and more. They also provide portfolio management and advisory services, as well as detailed fundamental and technical research reports.
Angel Broking is one of the largest full-service retail broking houses in India, and has a dedicated research team to help clients with detailed research reports to succeed in various market segments.
Brokerage fees and charges
Demat account opening and brokerage fees vary among brokers in India. While most of them provide free demat accounts nowadays, they may charge you transaction fees when you buy and sell equities. Apart from account opening fees, also check the annual maintenance fee and transaction charges that your demat account is costing you.
Transaction charges are the one that you must be careful about because it can vary widely among brokers. Demat account opening is free with Angel Broking, one of the best brokers in India. You can make equity delivery trades for a lifetime at zero cost while intraday trades cost just Rs. 20 per order, one of the lowest in the industry.
Simple and fast
Opening a demat account shouldn’t be a lengthy and cumbersome process. SEBI has detailed guidelines on how to open a demat account but your broker should be able to simplify the process and shorten the account opening process even more.
The best brokers in India have moved the demat account opening process to an entirely digital platform. Your brokers should be able to carry out the entire e-KYC, verification and documentation process online. The self-identification work according to SEBI guidelines should also be done through real-time online videos. Ask your broker how soon you can start trading after opening a demat account; sooner the better.
Trading in equities and derivatives should be a seamless process because even a second’s delay can make the difference between profits and losses. It’s best if your broker can provide a 2-in-1 demat and trading account so that you can avoid the delay in transactions that occur when you have two different brokers.
If you are among those investors and traders who want to keep a tab on things, make sure that your broker has a mobile app for on-the-go trading, investing, monitoring and tracking.
Having the right trading platform is extremely important, especially if you want to get into intraday trading. Therefore, select a broker with the best trading platform. Today, web-based and desktop and mobile app trading platforms are gaining popularity as they are fast, efficient and simplified. Carry out some research on the trading platforms that your broker is using. They should be stable, reliable and bug-free.
Angel Broking offers three types of trading platform to clients such as the Angel Broking Trade, Angel Broking App and the SpeedPro desktop trading software. These award-winning trading platforms are known for its simplicity, speed and stability.
Before you open a demat account, keep these important points in mind and you will surely make the right decision. However, don’t mistake caution for inaction. Act soon and open a demat and trading account today. Take the first step towards generating wealth from India’s massive financial market.