Thursday, January 29, 2009

Demat Account : What is it ? and How to open it ?

What is a Demat Account ?
In simple terms, Demat Account is like a Savings account where here you hold shares like holding money in Savings account. Just like opening account with a bank if you want to save money or make payments through cheque, you have to open Demat account if you want to buy, sell shares.
Like viewing Savings account transaction in its statement in Demat account too you can view the statement of your buy and sell share details. Earlier you hold all the shares in physical form that is in paper format, but now you can keep it electronically in Demat account. DEMAT stands for Dematerialisation. In bank account you have to maintain minimum balance but here you can have zero balance of shares. While opening bank account you need to deposit minimum balance, but to open a Demat account you need not hold any share.
How to open a Demat Account ?
To open a Demat Account you have to look for a registered DP (Depository Participant). Most banks and also many brokers are all DPs. To get a list of all the registered DPs visit the NSDL and CDSL websites.
Documents needed for opening a Demat Account
Here is the list of documents needed for opening up a Demat Account. Not all of these are required. The copies of required documents from the below list has to be submitted, but you may need the originals for verification.

1. PAN Card
2. Driving licence
3. Ration Card
4. Electricity Bill
5. Telephone / Mobile bill
6. Bank statement
7. Employee ID card
8. Passport
9. Passport size photographs (2)

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Disclaimer: All the information given in this blog is only my ideas and knowledge what I got from internet or other sources. For any interest rate, charges etc check the particular service as the charge might have changed. Regarding the intraday trading tips, this is applicable for that day only and also shouldn't be taken as advice. All the actions taken by you is responsible by you only. Thanks.

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