The first step towards having an online presence for stock market investing is opening a Demat account. A Demat account is often regarded as the pathway to online stock trading. Since investment in stocks has gained good momentum in the last couple of years, more and more investors are trading in the stock market.
People have realized the need to have multiple sources of income to maintain their flow of savings. These come handy during emergencies and an individual does not have to rely on anyone to protect themselves and their family. Stock market trading has therefore gained traction and made a good investor base.
As a new investor, it is advisable to conduct your research and look for a suitable Demat account. To succeed in the next steps, due importance needs to be given to selecting the right Demat account.
Here are the factors that you need to keep in mind:
1. Recognize the ability to trust and understand legacy
As an investor, you should always look into the background of the depository participant and the company history. The key idea is to learn about the kind of operations and get a glimpse of their customer base. If you cannot trust your depository participant, there is no further reason to continue with them. Hence, understand their legacy and create a relationship built on mutual trust.
2. Security check
When you select and finalize on a depository participant, you trust past trading activities and their built-in system that will hold your securities safely. An investor must check that the depository participant has installed the highest level of security as possible to detect and prevent any unauthorized access or attack. The security system should be well encrypted so that there is no sort of lapse detected anywhere.
3. Ease of Account Opening
As much effort is required to study and select a stock broking platform, opening a Demat account is much simpler. Most online stock brokers offer a seamless, contactless, and hassle-free service, making the entire process faster. There is no requirement of tons of paperwork and complexity due to this. Basic IDs like your Pan card and Aadhaar Card will be required to do the KYC. The UIDAI will authorize the same and send an OTP to the registered contact number. Once the number is verified, the process is completed.
4. Easy to operate
Investors should be able to track the movements in their portfolios from anywhere and anytime. Since the entire portfolio is managed on the broking platform app or website, the investor can access it with the help of the internet. You may be able to download the transaction reports and statements from your smartphone! This allows you to control your account.
5. Range of products offered
You can invest in any type of security, such as mutual funds, badlands, and stocks. Having a single one-stop Demat account is the ideal choice for most investors. When choosing a stockbroker, you must check which type of account they provide.
6. Demat Account service charges
To avoid any chaos or confusion in the future, investors must check and inquire about the charges to be levied for account opening or maintenance. Also, to attract investors, several depository participants offer free Demat account opening. Many depository participants are providing free Demat accounts to investors.
7. Online stock broking service
Although SEBI has given the go-ahead to investors for selecting their broker, it is highly recommended to carry operations under one roof for ease.
Conclusion
Since the shift to digital trading, the need to store physical copies has finished. To keep your dematerialised securities, you must have a Demat account as an investor.
