Demat account: think beyond savings account
The topics covered in this post are : What is a Demat account ? How to open a Demat account? What are the benefits of opening a Demat account ?
What is a DeMAT or Dmat account ?A DMAT or DEMAT account is an account which you need for buying or selling shares of a company or stocks and other equities (like exchange traded funds - Liquid Bees, gold etfs etc.). Just as bank accounts hold money, demat accounts hold equities. Demat stands for Dematerialisation. Earlier investors used to hold shares in paper format, Nowadays they are stored electronically in your Demat account. You cannot put money in demat account, only equities.
How to open a Demat account ?- Documents required to open a Demat account may include (i) copy of PAN card (ii) valid identification and address proof. (iii) Bank details (for e.g. photocopy of your bank account passbook). (iv) Copies of your recent photograph.
- A DP (or a Depository Participant) is an institution or agent which offers the service of demat account. There are several DP's in India, for e.g. SBI, ICICIdirect, UTI, HDFC, Sharekhan, Reliance Money, Motilal Oswal, etc. Go to a DP with the required documents to open a Demat account.
Comparison of Demat account charges:
Typical account maintenance charges for Demat accounts are a couple of hundred rupees per anum. I have a Demat account with State Bank of India and I pay Rs. 400/- p.a. Here is a table comparing account opening and account maintenance charges of demat accounts charged by various institutions (for individuals).
| Institution | Account Opening Charges | Account Maintenance Charges |
| ICICI Demat Account | NIL | Rs. 500/- per year. |
| SBI Demat Account | NIL | Rs. 400/- per year. (Rs.350/- if you recieve email statements) |
| Kotak Demat Account | NIL | Rs. 30/- per month. |
| Reliance Money Demat Account | NIL | Rs. 50/- per month. |
| Sharekhan Demat Account | NIL | Rs. 300/- per year. |
| CitiBank Demat Account | NIL | NIL |
It is highly recommended that you also open a online trading account (if possible) when you open a Dmat account. Here is a list of things that you can do with a few clicks once you have a Dmat account and an online trading account linked to it.
- Buy shares and stocks of any company on BSE and NSE.
- Invest in Mutual funds online (no paper work !) (as such to simply buy mutual funds you do not need a demat account)
- Invest in Gold through Gold ETFs.
- Apply for IPOs (Initial Public Offer) online.
- Trade in Futures and Options (these are not recommended for beginners)
- Invest in Liquid BeEs (Liquid ETF) - this is "like making" a quick short term fixed deposit.
SBI DEMAT or DMAT account
how to operate a demat account?
The main purpose of a demat account is to record or 'store' all your shares and equities. I have a demat account with SBI (State bank of India). It is linked with the online trading account with SBICAP Securities. Here is a picture which gives an idea of how one can operate or see details of your demat account online.
how to operate a demat account?
The main purpose of a demat account is to record or 'store' all your shares and equities. I have a demat account with SBI (State bank of India). It is linked with the online trading account with SBICAP Securities. Here is a picture which gives an idea of how one can operate or see details of your demat account online.
You will have to read my other blog posts below (or similar pages on the internet) to understand more about investments mentioned above.
Related posts :
- Introduction to Mutual Funds
- Exchange Traded Funds - All those "BeES" on NSE
- GOLD ETF - Invest in gold without buying gold
- Liquid Funds : What, Why, How, etc.
- My own experience with Systematic Investment Plan (SIP)
- Tips for selecting a mutual fund
7 comments:
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Hi.. thanks a lot for giving such valuable articles/post on Investing/stocks...
But I found one mistake in your this post: http://niftyprediction.blogspot.com/2008/09/dmat-account-think-beyond-savings.html
Under the "Comparison of Demat account charges:"... you wrote that the Account Maintenance Charges for Citibank is NIL and in some other pages you wrote as Rs 250/- ... so which one is correct?
Account maintenance charges for CITIBank is Rs.250. and account opening charges are nil. If i have said account maintenance charges for CITIBank are nil, then its a mistake. Hope that clears your doubt.
Thanks for the info iinvestor,
Can I know if I can invest in gold and apply for IPOs using sbicapsec or motilal oswal?
Thanks
Prasad
sbi is charging an opening charge of rs 400 and the platform is terribly slow the customer service is good but not prompt the email takes abt 1-2 days to respond
Hi Boney,
Is the platform as slow as ICICIdiect...It really crawls during trade timings sometimes. Many times I cannot even login, leave alone trading!
Also can you suggest which trading portal gives a good speed?
Thanks
Prasad
Hi, I am Dinesh, I am new to trading. But i want to learn this trading. Please help me... And i am neighter an employee nor a student right now, so can i open demat account on my name..? please guide me... u can contact me on dineshrvcs@gmail.com
Thanks in advance.
Hello This Is Tauseef can i give me details how open demat account in SBI
tauseefahmad1988@gmail.com
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