Table of content

Types Of Demat Account

Table of content

Introduction to Demat account

Dematerialisation or Demat account changed the landscape of share trading in India. Prior to Dematerialisation, shares were physically traded and settled. The entire physical handling of stocks was costly, tedious, and time consuming, with a 14-day settlement cycle. Additionally, physical shares heightened the risk of loss, theft, and duplicity of share certificates. To eliminate these hassles and to accelerate the growth of online share trading, Demat accounts were introduced in the year 1996. Today, Demat accounts are mandatory to trade or invest in the Indian stock markets.

What is Demat account?

A Demat account is an electronic account which stores your financial securities or assets in digital form. A common misconception among investors is that Demat accounts are only for stocks. However, this is not true. You can hold diverse assets like equity shares, preference shares, debentures, bonds, mutual funds, exchange traded funds, insurance policies, and IPO (Initial Public Offering) etc. in a Demat account.

Demat accounts in India are maintained by national depositories -

  • National Securities Depository Limited (NSDL)
  • Central Depository Services Limited (CDSL)

While maintained with depositories, you cannot directly open a Demat account with NSDL and CDSL. Investors can open Demat accounts with depository participants i.e., brokers who act as a connecting link between depositories and investors.

How does Demat account work?

Demat account, trading account, and bank account all work in unison to facilitate seamless transactions. For instance, when you buy stocks, you first need to transfer money from your bank account to your trading account. Once the order is successfully executed, stocks are credited to your Demat account whereas funds are debited from your trading account. On the other hand, when you sell stocks, shares are debited from your Demat account and money is credited to your trading account. All this happens in T(Transaction) + 2 working days.

Different types of Demat accounts

Depository participants in India typically provide three types of Demat accounts.

  • Regular Demat accounts

    – Resident Indian citizens with domestic bank accounts can opt for regular Demat accounts.
  • Repatriable Demat accounts

    – This Demat account is specifically for Non Resident Individuals with Repatriable, Non Resident External (NRE) bank account, allowing for easy transfer of funds overseas.
  • Non-Repatriable Demat accounts

    – With a Non Repatriable Demat account, you cannot transfer money overseas. A Non Resident Ordinary bank account is necessary to open a Non Repatriable Demat account.

Documents required to open Demat account

With the advent of technology, the process of opening a Demat account has become extremely easy and convenient. Here are the documents required to open a Demat account with m.Stock:

  • Pan Card
  • Proof of Residency: Aadhaar, driving licence, registered lease agreements, power bills, passports, copies of insurance policies, rent receipts, landline phone bills, gas receipts etc.
  • Pay slips or tax slips as evidence of income (for activating Futures & Options segment)
  • Bank account statement or passbook
  • Signature and photograph

How to open Demat account with m.Stock

  • Visit www.mstock.com
  • Click on ‘Open an Account’ button
  • Enter your mobile number
  • Enter your KYC details
  • Verify information like with address proof, ID proof, date of birth and PAN number
  • Make the account opening payment. It is recommended to open a Rs 999 Zero Brokerage account, which allows you to trade across products for life at zero brokerage.
  • Add your bank account and complete your profile.
  • You will receive login credentials within 24 working hours, and you can start trading!

Demat accounts have reduced the costs associated with share trading like transfer fees, courier, and stamp duty charges etc. But investors are still unable to reap their full potential as they end up paying high brokerages in the long term in lieu of zero upfront account opening fees. This is where m.Stock Demat account shines. With a one-time fee of Rs 999, you can enjoy zero brokerage across products for life. So, open a m.Stock Demat account and benefit from zero brokerage across products for life.

More Related Articles

demat without aadhar

23 February,2024

How to Open Demat Account Without Aadhaar Card?

A demat account is a type of account that allows investors to hold their shares and securities in an electronic format. A demat account is linked to a trading account and a bank account, which enable the investors to buy and sell shares and receive or pay money respectively. A demat account eliminates the need for physical certificates and reduces the risk of theft, loss, or damage of the documents. A demat account also offers convenience, security, and lower transaction costs for the investors.

dp has not transferred shares to demat account

07 February,2024

What If Your DP Has Not Transferred Shares To Your Demat Account by T+1?

After operating on a T+2 settlement cycle for years, the Indian stock market finally switched to a T+1 cycle on February 25, 2022. According to the T+1 trading settlement cycle, shares you purchase on a delivery basis are credited to your demat account within a day from the transaction date. For instance, let’s say you purchase 100 shares of a company on a Monday. These shares will be credited to your demat account by the end of the next day...

How to Use a Demat Account

28 December,2023

Learn Trading Online in Demat Account

The migration to online trading has made the Indian stock market more accessible than ever to retail traders. Anyone interested in creating long-term wealth can now participate in the markets. If you’re new to the world of trading and would like to get your wealth creation journey started, you first need to know how to do online trading with a demat account. In this article, we’re going to look at just that. But before we delve into it, let’s quickly read through the significance of a demat account.

Open your Lifetime Free Brokerage Account Onboarding in just 5 minutes**

+91
T&C and privacy policy

Power your investments with our smart trading platforms

mobilefooterimg
  • app_download_icon_img
    5 million+
    App downloads
  • 1_Click_icon_img
    1-Click
    Order Placement
  • higherreturns_icon_img
    2,361 Crore+
    Average Daily Turnover