The term Demat account or Demat trading account is becoming popular with each passing day, with every other individual willing to shift to other types of investment instruments. The number of people investing in shares and stock markets has been gaining new heights every year with more than a ten to fifteen per cent hike in Demat account opening. The ongoing demand for Demat accounts has also insisted depository participants like LKP Securities provide impressive features to their customers at the lowest cost available, which has proved to be beneficial for Demat account openers.
A guide to opening a Demat account
Before learning the steps to open a Demat account, you must have a fair and square idea about certain aspects of opening a Demat account. These are given below.
What does holding a Demat account mean?
Dematerialised account, commonly known as Demat account enables individuals to invest in shares and stocks and store these investments in an electronic pattern. Demat trading account works similarly to a bank account. However, there is a fine line between a Demat account and a bank account. While bank accounts are primarily focused on holding the invested finances of an individual, a Demant account is responsible for holding the shares and different types of securities such as government securities, bonds, mutual fund investments, Initial Public Offerings and many more. Opening Demat account enables an individual to safeguard his investments from any probable risks and ensures smooth handling and maintenance of their valuable investments.
Who are depository participants?
A depository participant is an agent or intermediary of either of the central depositories of India that is, CDSL or NSDL to offer depository facilities to traders and investors. In order to function as a depository participant, one needs to gain a license from either of the two central depositories. These two central depositories are operated by the apex investment and trading administrative body called SEBI.
What is the distinctive client ID?
Every investor gets a distinctive client ID made up of sixteen digits and is different for every investor account. This number functions as the customer’s identity. The eight digits at the beginning of the client ID denotes the depository agent and the final eight numbers function as a distinct identification for the customer, which enables them to buy and sell securities and shares.
Step by step process to open a Demat Account
A Demat account can be either opened online or offline with a licensed depository participant. Below we have provided both the procedures. You can follow either of them for opening Demat account. Keep reading to know more.
Follow the steps given below to open a Demat account online.
Research about different depository participants
The first step that you need to follow for opening a Demat account is to research different depository options. Look at your options and study them minutely. Check for the services offered by each one of them and the price at which they are offering the services. Presently, LKP Securities is offering the best Demat account India, which enables prospective individuals to open their Demat account free of any charges along with a wide range of features.
Keep the important documents ready
Before you proceed any further, keep all your official documents beside you. This is likely to include all the important files. This will save you time while opening the account and amp up the entire process.
Visit the website of the chosen depository participant
Once you have done your research and finalised your option, you need to land on the official website or download the app of the depository participant. If your choice is LKP Securities, then visit their website and fill in the basic details such as name, city and contact details.
Enter the OTP
After entering the contact details, you will receive a one time password on your registered mobile number. Enter that OTP in the box given and tap on ‘Get started with us’.
Fill in the application form
Once you are redirected to the next page, the account opening application form will be displayed in front of you. Peruse the instructions provided, based on which start filling the form.
Satisfy the KYC norms
This is an important stage. Know Your Customer or KYC is a mandatory step to open a Demat Account. In this step, you need to upload certain scanned documents that include your proof of address and identity, income proof, and bank account records.
Carry out the process of verification
Once you have submitted all the relevant details along with the KYC documents, you will be made to go through a verification process. This is a compulsory step followed by every certified depository participant such as LKP Securities to ensure the credibility of the information and documents provided by the investor.
Sign the agreement bond
On the verification of your documents, a screen displaying the agreement copy will appear in front of you. This bond comprises all the minute information regarding the rights and duties of both the investor and depository. Read this fine print carefully and tap on of ‘I agree’.
Receive the unique ID
Once you have accepted all the terms and conditions related to the Demat account and signed up for it successfully, you will receive your unique ID either on your registered phone number or email ID.
Once you receive your unique ID you will be all set to use the account for investing in the share and stock market.
The offline procedure is quite similar to the online procedure, where the only difference is that you have to visit your depository participant in person. Below we have given the method to open a Demat account offline.
Choose your preferred depository participant. You can choose LKP Securities to get the best Demat account India.
Fill in the application form provided by them along with the necessary documents such as income and identity proof, address proof and bank records and submit it to them.
The depository participant will verify the submitted documents, where you will be made to go through a physical verification process.
Make the payment required for opening the account. However, if you are choosing LKP Securities you will not be charged any money to open the account.
Once the entire process is completed, it is time for you to use the provided details and access the account. Use it in full swing and make the best out of your future investments.