
What is demat account
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Demat Account is an account that is used to hold shares and securities in electronic format. The full form of Demat account is a dematerialised account. The purpose of opening a Demat account is to hold shares that have been bought or dematerialised (converted from physical to electronic shares), thus making share trading easy for the users during online trading.
In India, depositories such as NSDL and CDSL provide Free Demat account services. Intermediaries, depository participants or stockbrokers—like Angel Broking—facilitate these services. Each intermediary may have Demat account charges that vary as per volume held in the account, type of subscription, and terms and conditions between a depository and a stockbroker.
What is Demat account?
A Demat Account or Dematerialised Account provides the facility of holding shares and securities in an electronic format. During online trading, shares are bought and held in a Demat Account, thus, facilitating easy trade for the users. A Demat Account holds all the investments an individual makes in shares, government securities, exchange-traded funds, bonds and mutual funds in one place.
What is dematerialisation?
Dematerialisation is the process of converting the physical share certificates into electronic form, which is a lot easier to maintain and is accessible from anywhere throughout the world. An investor who wants to trade online needs to open a Demat with a Depository Participant (DP). The purpose of dematerialisation is to eliminate the need for the investor to hold physical share certificates and facilitating a seamless tracking and monitoring of holdings.
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Importance of Demat account
A Demat account provides a digitally secure and convenient way of holding shares and securities. It eliminates theft, forgery, loss and damage of physical certificates. With a Demat account, you can transfer securities immediately. Once the trade is approved, the shares are digitally transferred to your account. Moreover, in case events like stock bonuses, mergers, etc., you get shares automatically into your account. Your Demat account information regarding these activities is available online by simply logging into the website. You can trade on-the-go using your smartphone or desktop. So, you needn’t visit the stock exchange to transact. You also enjoy the benefit of reduced transaction costs because there is no stamp duty involved with the transfer of shares. These features and benefits of a Demat account encourage a larger trade volume by investors, thus increasing the potential for lucrative returns.
How does a Demat Account work?
Trading through a Demat account is similar to the procedure of physical trading, except that a Demat account is electronic. You begin trading by placing an order through your online trading account. For this purpose, it is necessary to link both trading and Demat accounts. Once an order is placed, the exchange will process the order. Demat account details the market price of shares and the availability of shares is verified before the final processing of the order. On completion of the processing, shares are then reflected in your statement of holdings. When a shareholder wishes to sell shares, a delivery instruction note has to be provided with details of the stock. Shares are then debited from the account and the equivalent cash value is credited to the trading account.
Types of Demat account
There are two types of Demat accounts—Repatriable Demat account and Non-repatriable Demat account. Repatriable funds are deposited in a separate bank account known as the Non-Resident External Account (NRE account). Repatriable funds are those funds which can be transferred abroad. The investments made from these funds are maintained in a The Repatriable Demat account holds the investments made from repatriable funds. On the other hand, non-repatriable funds (funds which cannot be taken/transferred abroad) are deposited in a different bank account known as the Non Resident Ordinary Account (NRO account).The Non-repatriable Demat account holds the investments made from non-repatriable funds. Money can easily be transferred from an NRE to an NRO account. However, once the transfer is made, the repatriability is lost and the money cannot be transferred back to the NRE account.
Benefits of opening a Demat Account with Angel Broking
- Invest Easily & Earn Better
- Gain access to the award-winning Angel Broking App - Trade, learn, and stay updated on the go. The app gives you latest news, research reports, and real-time updates on your fingertips. It also offers Portfolio Health Check to help you maintain an ace portfolio
- Get a better chance of earning higher returns with ARQ
- Fastest account opening process - Start trading in 1 hour
- Highly secure & speedy financial transactions
In addition to the advantages outlined above, you can learn more about the benefits of online share trading in India with Angel Broking.
Advantages unique to ARQ - by Angel Broking

Index beating returns
ARQ gives you a shot at earning the best possible returns. It takes emotional bias completely out of the equation and helps you make the right investments that have the potential to offer great returns.

Personalised recommendations
ARQ uses Nobel prize-winning Modern Portfolio Theory to give you personalised recommendations. Thus, you get the best asset allocation advice across major asset classes like equity, gold & debt mutual funds, which is unique to your risk preferences and helps you achieve your financial goals faster.

Recommendations based on future potential
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Start investing with any amount
There is no fixed investment amount to start investing with ARQ. You can experience the power of ARQ by opening a Demat account with Angel Broking and start investing with any amount of money.

Portfolio notifications
Once you start investing with ARQ, you will receive periodic auto notifications to rebalance your portfolio. Thus, ARQ always keeps you invested in the most profitable stocks and mutual funds.

ARQ outperforms benchmarks consistently
Extensive back-testing and comprehensive track records have proven time and again that ARQ outperforms the benchmarks by a handsome margin. So, if you invest in recommendations given by ARQ you stand a better chance to earn higher returns.
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Demat Account Glossary - Meaning of Demat Account Jargon
Electronic Certificate
Bank account, trading account, and Demat account are the three essential necessities while dealing with investments. When you purchase a company’s shares, your ownership is marked with a certificate. This certificate is now available in electronic format and is known as Demat credit.
Central Depository (CD)
Central Depository is basically a central agency that maintains all the relevant information pertaining to Demat accounts that are opened with DPs throughout the country. India’s central depository agencies include National Services Depository Limited (NSDL) and Central Depository Services Limited (CDSL).
Depository Participants (DP)
The DPs or Depository Participants are fundamental intermediaries between the account holders and the Central Depository. DP’s include several banks, brokerage firms, and other financial institutions that offer investors with Demat accounts.
Transaction Identification
In order to buy and sell electronic securities, every investor needs a trading account, which is as important as a demat account. Every trading account is given a unique identification number that has to be used for all the transactions of an investor.
Portfolio Holding
The Demat account of an investor keeps all his investment holdings of investors including: equity holdings, exchange-traded funds, mutual funds, government securities and bonds. All the holdings together are referred to as the investors’ portfolio holding, which they can access through their Demat account. All their purchases are reflected as Demat credits while all their his sale transactions are debited from the Demat account.
We hope that the information above clarifies how useful Demat accounts are. So, get started with opening a Demat account and enjoy its benefits.