What is a demat account? How does it work?
A demat account also works like a bank account. Here too the bank balance can be entered only in the passbook, you cannot keep it in physical form, it is also secured electronically, and debit tax is credited just like a bank account.
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What is a demat account? How does it work?
A demat account also works like a bank account. Here too the bank balance can be entered only in the passbook, you cannot keep it in physical form, it is also secured electronically, and debit tax is credited just like a bank account.
Why have a demat account?
As per SEBI guidelines, shares cannot be sold or bought in any form other than demat. Therefore, if you want to buy or sell stocks from the stock market, you must have a demat account.
How does it work?
When you buy shares, the broker credits the shares with the demat account and this appears in the details of your holding. If you trade from an internet based platform, you can view your holdings online. In particular, the broker credits the stocks on T + 2, which is 2 days after the trading day.
When you sell shares, you have to give delivery instructions to your broker, in which you have to fill in the details in the stock sold. The stock is debited to your account and you pay for the shares sold. If you pay online, the debit of the shares and the credit of the amount will automatically appear in your account.
There are two depositories in India - National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), through which shares are held by various depository participants.
Benefits of opening a demat account
There is no problem in holding shares in physical forms.
There is no dilemma and you can buy and sell a share in it.
There is no stamp duty on transfer.
No transfer deed is required.
(benefits of demat accounts)
Be sure to keep these things in mind before opening an account
An account where one can keep his shares and is protected electronically is called a demat account. A demat account is mandatory if you have to buy or sell shares from the stock market in India. In addition, you must have a demat account even if you have to apply your shares in the initial public offering (IPO).(benefits of demat accounts)
Read these 6 special things in the slider-
1.The two depositories in India are National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), through which shares are held by various depository participants. The storehouse has protections like offers, debentures, securities, government protections, shared asset units and so on.
2.Depository Participants
Depository participants are intermediaries between investors and depositories. In order to avail any service from the depository, the investor needs a depository participant.
3.Basic services
The demat account can be transferred in person or to an already available demat account. If the holdings of your demat account like securities, stocks, mutual funds, bonds are less than 2 lakh then you can convert it into your available account. Consumers holding Rs. 0 to Rs. 50,000 do not get conversion facility. Also if the holding is between Rs.50,001 to Rs.2 lakhs then Rs.100 in conversion
Have to pay.
4.Charge
The charges and fees involved vary from institution to institution and also depends on the nature of the account and the amount to be transferred. Account opening fee, annual maintenance fee, transaction or brokerage fee are some of the charges which
5.Included in the demat account.
Benefits of Demat Account There is no hassle in holding shares in physical forms. There is no dilemma and you can buy and sell even one share. There is no stamp duty on transfer. No transfer deed is required.
6.Dematerialization
The process of converting your physical shares electronically is called dematerialization.
