How to open a Demat account: Step-by-step guide

Demat Account, also known as Dematerialized Account, is an electronic account that allows individuals to hold and manage their securities. Using one platform, investors can trade stocks, bonds, ETFs, and government securities.

When it comes to online trading, you need to open demat account online with a Depository Participant (DP). This article will describe a step-by-step guide on how to open a demat account online and how to open a demat account using an app, along with the benefits.

What Is a Demat Account?

Physical trading was a common practice before 1996. However, SEBI introduced demat accounts, which transformed the way people invest. Demat accounts enabled laypeople to invest in the stock market online.

To trade on the stock market, you must have a demat account, also known as a dematerialised account. The purpose of a demat account is to store your shares electronically. In your demat account, you can hold stocks, ETFs, bonds, and mutual funds.

A demat account can be accessed from anywhere, making it more convenient. Also, by converting physical share certificates into digital format, demat accounts ensure account holders have immediate access to their shares.

How To Open A Demat Account?

The process of opening a demat account can be done online or offline. Here is a step-by-step guide to opening a demat account online.

Step 1: Choose A DP Website

Depository Participants (DP), such as banks, financial institutions, and brokerage firms, act as agents for investors and help electronic transactions. Once you've done your research, pick a DP site that's safe and secure and check out its page.

Step 2: Click On ‘Open Demat Account’

Click the 'Open Demat Account' option on the DP website of your choice, then follow the instructions.

Step 3: Fill Out The Demat Account Opening Form With Your Details And Submit It

To open a free Demat account, fill out the online form. You'll need to fill out the online form with information like your phone number and email address, etc.

Step 4: You'll Get A One-Time Password

Once you fill out your details at the start, you'll get a One-Time OTP.

Step 5: Submit The Required Documents For Opening A Demat Account

You will need to share your PAN card and banking details. Also, you will need your PAN number and bank information to make the transaction.

Step 6: Completing The E-KYC Process, Verifying KYC Information, And Obtaining Demat Account Number

The KYC information you provided online needs to be verified. A KYC check is conducted online using the details you provide.

Open Demat Account Using The App

The demat app for Android makes it easy to open a demat account. Open a demat account using the blinkX app by following these steps:

●Download the blinkX app from the Google Play store.

●Select 'Open Demat Account'.

●You will be contacted by a blinkX representative who will assist you with the account opening process.

●You need to complete KYC and submit the required documents.

Benefits Of Opening Demat Account Online

As mentioned earlier, shares were once purchased or sold by placing a telephone order or mail request with your broker. It took many days for clearing and settlement of shares. In addition,there was always a risk of fraud, forgery, or impersonation. However, with the introduction of online demat accounts in Indian markets, all this changed. The following are the benefits of an online demat account.

Your Holdings Are Protected From Loss, Theft, And Damage

Your holdings are dematerialised when you open a Demat account online. This means they won't get damaged from wear and tear, lost, or stolen.

Keeping You Safe From Fraud, Forgery, And Impersonation

Often, physical shares were forged before online Demat accounts or ownership was impersonated using forged documents. With Demat accounts, your holdings can't be forged or impersonated on the exchanges.

Settlement In Less Time

An online demat account lets you buy and sell shares with just a few clicks. Having a demat account has the benefit of hassle-free, faster settlement and ease of transactions. This results in faster ownership transfer and payment clearing. As a result of faster settlements, trading becomes safer as well as less prone to fraud.

Loan Facility

Having a demat account provides the opportunity to pledge the securities in the account as collateral for bank loans.

A Single Account Holds Multiple Instruments

Besides stocks, you can also invest in Equity Linked Savings Schemes (ELSS), Unit Linked Insurance Plans (ULIPs), commodities, and Futures & Options (F&O) through your online Demat account. Your online demat account also allows you to track and compare all your investments on a single screen.

Conclusion

A Demat Account is essential for online trading, allowing individuals to hold and manage their securities electronically. To open a demat account, select a reliable Depository Participant (DP), complete the account opening form, submit the necessary documentation, and complete the KYC procedure. By using a very good app like blinkX, you can open a Demat Account online. The blinkX app can be downloaded for free from the Google Play store, which offers a seamless account opening process. Its user-friendly interface and dedicated support guide you through the entire process.

(Above mentioned article is consumer connect initiative. This article is a paid publication and does not have journalistic/editorial involvement of IDPL, and IDPL claims no responsibility whatsoever)