Showing posts with label Demat. Show all posts
Showing posts with label Demat. Show all posts
How to buy shares without a Demat Account?

This should have actually been a part of my previous post How to buy shares using a Demat Account? because it is meant to answer questions like How to buy shares? How to invest in stock market? etc.

There are two ways of investing in shares. One is directly buying shares. For example you decide that you are going to buy 25 shares of BHEl, 50 shares of Tata Steel, 10 of Cipla and so on. For such buying, you MUST have a Demat account.

However, there is also another way of investing in shares. Which can be thought of as indirect way of investing - Invest in a Mutual Fund. After all, a mutual fund takes your money and invests them in shares and gives you the return/profit (after deducting their fees called entry/exit loads). There are thousands of mutual funds around and several of them focus on some specific sectors. For beginners, this is the safest way to invest in a stock market. Well, safest here does not mean risk free. You still have to pick up the right mutual fund which suits your risk appetite and no matter how good the mutual funds past track record the investment is still subject to market risks. However for investing in Mutual Funds you does not require you to have a Demat Account. However you do need a PAN Card.


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Feb 25, 2009

How to transfer shares between Demat Accounts?

Just as every person is allowed to open as many savings account as he likes, there are no restrictions of the number of Demat Accounts a person can have. Moreover you can transfer shares from one demat account to another (whether that other demat account is owned by you or not) by following the steps.

  • Fill in a transfer-shares slip. Every Depository (DP) usually sends out such transfer slips once in a year or so (just like banks issue check books). If you have not recieved them, contact your DP.
  • Once you fill in the transfer slip, the shares will be transferred according to your given instructions within a few days.
  • Click on Demat Account Charges to check various charges charged by leading Demat Accounts like SBI Demat Account, ICICI Demat Account, Motilal Oswal Demat Account, Sharekhan Demat Account, etc. for performing this transaction.

If you think you are not going to use one of your demat accounts and would like to transfer all the shares to your other demat account, you can give instructions to do so while closing your account. My post on Comparison table of demat account charges has a summary of Account closing charges (yes, some DP's may charge you money, something of the order of Rs. 100/- for closing your account).


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Feb 20, 2009

How to open a DMAT account ?

DMAT Account is an account which you need to invest in shares, stock markets, or exchange traded funds.

To open a dmat account you first need a PAN Card. PAN Card is nowadays extremely essential in India for not only opening a Dmat Account, but also investing in Mutual Funds, depositing large amounts, typically over Rs.50,000 in banks, etc. So it is a good idea to apply for it as soon as possible. (If you already have a PAN Card, scroll down).

Documents needed to apply for PAN Card:Pan Card required to open Demat Account
  1. Proof of Identity : e.g. your 10th class SSC certificate, Ration Card, etc.
  2. Proof of Address: Ration Card, Driving Licence, etc.
  3. Recent Color Photograph : 3.5cm x 2.5cm
Visit Government website on PAN-Card for more details and questions.

Once you have a PAN Card, you will then you have to decide whom to open your dmat account with. Just as you can open a savings account with various banks, you can open your dmat account with various 'Depositories' or DPs. A depository or a DP is simply an institution with which you can open your Demat Account. You can choose to visit one of the following places: SBI, ICICI, HDFC, Sharekhan, CITIBank, UTI or Axis Bank, IDBI Bank, or several other banks and even some brokers offers this facility.
read:How to choose the BEST DEMAT ACCOUNT?
read:Demat Account : Think beyond Savings Account
read: Compare Dmat Account Charges
read: Compare Brokerage Charges

Documents Needed to Open a Dmat Account
  1. Copy of your PAN Card. It is also advisible to carry your original PAN Card. PAN Card also serves as Proof of Identity.
  2. Proof of Address. e.g. light bill, bank passbook etc.
If you are opening your Dmat Account with a Bank like SBI, and you would like to link it (i.e. view your holdings online) you certainly need to carry your Bank passbook. You may also use it as proof of address.

Related posts:


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Jan 30, 2009

How to choose the BEST DEMAT ACCOUNT?

In this post I will explain the points which I think one should consider before choosing or opening a Demat Account. There are two main things one considers while selecting a service or a product.

  1. Quality.
  2. Price.
As far as Dmat Account is concerned, Quality just means Quality of the service. In this case, this may include
  1. Ease of Access of your Demat Account information : For me this just means that I must be able to access my demat account information online. SBI Demat Account, the one I have, does allow you to access your holding/portfolio details online via a tab with their internet banking account. I am sure several other Demat Acounts also offer that facility.
  2. Customer Service: Frankly speaking I have had no chance to interact with the customer service of any depository. For me Demat Accounts are passive accounts, which just keep track of your equities or stocks holdings. However, if you plan to buy / sell directly through your Depository or if you like shares in paper formats then these things may play a role. I am not the right person to provide any experience in this matter.
The second point: price is a bit tricky and I'll explain how. One incurs the following costs while operating a demat account. (there are other charges, but the following matter most to most of us)
  1. Demat Account Opening Charges
  2. Demat Account Maintenance Charges
  3. Charges for Buy/Sell Trades.
1. is a one time charge and 2. is a fixed annual charge. The charges for Buy/ Sell transactions are a bit annoying because they can eat into your profits. Who would want to pay a couple of 25, or 30 rupees each time you perform a transaction? Click on Compare Demat Account Charges to compare Demat Account Charges for various Demat accounts like SBI Demat Account, ICICI Demat account, HDFC Demat Account, CITIBank Demat Account, Sharekhan Demat Account.

The best case scenario is when your DP does not charge you at all for buy/sell trades. For example, for trades performed on SBICAP Securities, SBI Demat Account does not charge anything. Same is true for ICICI Demat Account if you perform trades on ICICI Direct. However in this case it is not the charges of Demat Account that one should look at but the sum total of Demat Account Charges plus Brokerage Charges. (here the sum total is way high for ICICI). So I would suggest dont just choose a Demat Account. Think of choosing a pair: Demat Account and a Online Trading Account. Selecting an Online trading account is much more delicate as here a good customer service, accurate execution of transactions, good server, etc. matter much more.


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Jan 10, 2009

Sharekhan Demat Account Charges

Here are the Demat Account Charges for Sharekhan D-mat Account.
Read: Compare Demat Account Charges of SBI, ICICI, Sharekhan, CITIBank, HDFC.



Demat Account Opening Charges
NIL
Demat Account Maintenance Charges
Rs. 75/- per quarter (i.e. Rs. 300 per anum)
Account Closing Charges
 Rs. 100/-
Buy
0.02% (Minimum Rs. 15/-)
Buy (Off Market from other DP)
NIL
Sell
0.04% (Minimum Rs. 15/-)
Dematerialisation Charges
Rs.3/- per Certificate or Rs.15/- per request whichever is higher.
Rematerialisation Charges
Rs.25/- Per certificate or 0.12 % of the value of the securities requested for Rematerialisation, whichever is higher.
Custody Fee
NIL
Requests for Freezing or Defreezing Account
Rs. 25/- per request
Pledge Creation / Closure
0.02% (Minimum Rs. 15/-)

*SSKI Securities is the Brokerage house which owns the brand Sharekhan


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Jan 1, 2009

How to buy Shares using DEMAT ACCOUNT?

I have recently been getting a lot of visitors searching for How to buy shares using your Demat account? or How to place order using your Dmat account? and so on.

First you must understand that Demat Account is merely an account which 'keeps' your shares. Just as a savings account in a Bank keeps your money. Now if you want to buy shares "using" your Demat account you need to either have an Online Trading Account or find some Broker. You can either directly place an order with the Online Trading account with a few clicks, or you can call/tell your Broker to buy the shares for you.

There are two things you can do with the shares or stocks or equities that you buy. You can either sell them on the same day itself. Such buying and selling of shares on the same days is called intraday trading. Or you can choose to 'keep' those shares in your demat account (to be sold at a later date at your discretion), an action usually referred to as "take delivery" of those shares. Such a trade would be called "Delivery". The brokerage charged for delivery trades is typically more than that charged for Intraday trades. Read my post on comparison of brokerage charges in India to get an idea about how much brokerage is charged for Intraday and Delivery by leading brokerage houses in India.

T+3 rule

Remember that once you place a delivery order for shares (or stocks or equities) with a broker or on your online trading account, they are not immediately deposited in your demat account. They will only be deposited on the 3rd business day. T in T+3 refers to trade or the day on which trade has taken place.

Can shares bought for Delivery be sold on the next day itself, before having to wait for 3rd day on which they are deposited in your Demat account? Yes! this type of trade is called "Obligation". I'll write more about it later.


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Nov 24, 2008

COMPARE DEMAT ACCOUNT CHARGES

This post is all about comparing different charges one incurrs while opening/operating a Demat Account with various depositories : SBI, ICICI, HDFC, CITIBANK, SHAREKHAN, etc.

DEMAT Account Charges :

Comparison of Account Opening Charges, Account Maintenance Charges, Charges for BUY and SELL trades.
These are the charges which matter most to most of us.

Depository
Account
Opening Charges
Account Maintenance Charges
BUY
Charges
SELL
Charges
SBI
Demat Account
Charges
NIL
Rs. 400/-
per year (Rs.350/- if you choose email statement)

NIL
NIL for trade on' SBICAP Securities, else 0.03% (Min. Rs.30/-)
HDFC
Demat Account
Charges
NIL
Rs. 500/-
per year
NIL
0.04%
Min. Rs. 20/-
CITI Bank
Demat Account
Charges
NIL
Rs. 250/-
per year
NIL
0.06%
Min. Rs.18/-
Sharekhan
Demat Account
Charges
NIL
Rs. 75/- per quarter
0.02%
Min. Rs. 15/-
0.04%
Min. Rs. 15/-
ICICI
Demat Account
Charges
NIL
Rs. 500/-
per year (Rs. 450 if you choose email statement)
NIL
NIL for trade on ICICIDirect.com, else 0.04%*
*Min Rs.10/- for e-instruction, Min Rs.30/- for instructions through branches.

Comparison of Dematerialisation and Rematerialisation charges
(only relevant if you want or have shares in old paper format style)
Depository
Dematerialisation Charges
Rematerialisation Charges
SBI
Demat Account
Charges
Rs. 35/- for each request form, +Rs.2/- for each certificate
Rs. 25/- for each request form
HDFC
Demat Account
Charges
Rs. 35/- per request form+ Rs. 3/- per certificate
Rs. 10/- per certificate
CITIBank
Demat Account
Charges
Rs. 50/- per request form
Rs. 50/- per request form
Sharekhan
Demat Account
Charges
Rs. 15/- per request OR Rs. 3/- per certificate, whichever higher
Rs. 25/- or 0.12% of value, whichever higher
ICICI
Demat Account
Charges
Rs.35/- per request form + Rs. 2/- per certificate
Rs. 20/- per request form.


Comparison of Additional Statement Charges and Account Closing Charges

Depository
Additional Statements Charges
Account Closing Charges
SBI
Demat Account
By courier: Rs. 30/-,
By email: NIL
NIL
HDFC
Demat Account
Rs. 25/- (inland)
Rs. 500/- foreign
?
CITIBank
Demat Account
?
?
Sharekhan
Demat Account
Rs.10/- upto 10 pages. For every extra page, Rs.3/-
Rs. 100/-
ICICI
Demat Account
Rs. 20/-
NIL


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Nov 9, 2008

CITIBANK DEMAT Account Charges

Also see

CITIBANK DEMAT ACCOUNT CHARGES


Account Opening
Nil
Account Maintenance
Rs. 250/- per year
BUY (Market / Off-Market)
 Nil
SELL (Market / Off-Market)
 0.06% (Min. Rs.18)
Custody charges Nil
Dematerialisation Rs.50 per demat request
Rematerialisation Rs.50 per remat request
Transaction cum Holding statement Monthly free (if there are transactions in the account, else quarterly)
Pledge Closure 0.02%
Pledge Invocation Nil


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Nov 8, 2008

HDFC DEMAT Account Charges

Here is a list of HDFC Demat Account Charges. You may compare it with SBI Demat Account Charges or find more about HDFC Dmat by clicking on those words.





Minimum
1 Account Opening NIL --
2
Account Maintenance
Rs. 500/- per anum
Rs. 500/-
3
 Dematerializations Rs. 3 per certificate, plus Rs. 35/- per request Rs. 38.00
4
 Rematerialisation At actuals, as levied by the Depository Currently Rs. 10/- per certificate --
5
 SELL 0.04 % of the value of the transaction ** Minimum Rs.20.00
6
 BUY NIL --
7
 Pledge Services * 0.04% of the value of the shares Rs. 25.00
8 Asset Holding NIL --
9 Debt Transactions - Sell 0.04 % of the value of the transaction. Minimum Rs 500/- and Maximum Rs 5000/- per Txn Rs. 500.00 per txn.
10 Debt Transactions - Buy NIL --
11 Mailing Charges for non periodic statements and other communication Rs. 25/- per request for inland address Rs. 500/- per request for foreign address


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SBI Demat Account Charges

I have a SBI Demat Account and I am pretty happy with their service. I had earlier written about it in my post on Demat Accounts. In this post I will list all the charges (see below).


  1. Account Opening Charges : NIL !
  2. Account Maintenance Charges : Rs. 400/- (Rs. 350/- for customers receiving statements by email) per year.
  3. Dematerialisation : Rs. 35/- for each request form, additional Rs. 2/- for each certificate.
  4. Rematerialisation : Rs. 25/- for each request form.
  5. Closure of Account : NIL !
  6. Additional Account Statements : by courier - Rs. 30/- , by email - NIL !
  7. Buying equities: - NIL !
  8. Selling equities: NIL ! if you sell through SBICAP Securities, or eztrade.co.in. If you give instructions to branches to sell, then 0.03% of the transaction value (minimum Rs.30/-).
Let me elaborate on point 7 and 8. If you perform any transactions through SBICAP Securities, then you are not charged any additional fee (other than brokerage charged by SBICAP) for buying/selling transactions.

Related posts :


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DEMAT + TRADING ACCOUNT

In this post I am going to list / discuss fundamental concepts that as an investor you must know before operating your demat + Online Trading account.

In this post I am going to discuss the first question that arises in the mind of a new investor:
How to buy shares using your demat and trading account?
Also Read: Buying Shares using Demat Account

Here are a few things to remember :

  1. Your Demat Account is merely an account which keeps track of which shares or equities you have bought and you currently hold in your portfolio. So there is not much to do as far as 'operating' demat account is concerned.
  2. Your Online Trading account is the account which is used to place buy and sell orders. It is important to understand how to buy and sell shares using your online trading account. If you are interested in learning this, i recommend you watch THIS DEMO. It doesn't matter if you have a online trading account with sharekhan, or sbi or motilal oswal or any other online broker. This demo will help you understand basic concepts involved. Link

After having read the demo, you can go through the following list of 'must know' items.
  1. There are three types of BUY (or SELL) orders you can place. Market Order, Limit Order, Stop-Loss Order.
  2. There are two types of "Order Terms", i.e. Day and IOC (Immediate or Cancel). Day order means your order remains valid for that day until the market closes. For example if you place a day order to buy Tata Steel at Rs. 250, then your order will be valid throughout the day and will be executed as soon as there is a seller selling the shares for less than or equal to 250. As opposed to this if you place an IOC order, it will be executed at that moment if there is someone selling tata steel shares at a price of at most 250. If there is noone, the order is cancelled immediately. You do not have to manually cancel it. IOC is typically used by Intraday traders, if at all.
  3. You can either place an Intraday order or a Delivery Order. Intraday orders are squared off typically 15 minutes before the market closes. A buy Delivery order means the shares are deposited in your demat account (on third working day). A sell Delivery order means shares are sold from your demat account (you must first own them !). Note that Brokerage Charges for Delivery Orders are usually more than the brokerage charges for Intraday Orders.
I will keep updating this post to make it more user friendly. Meanwhile if you have questions, you may try posting a comment.


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Nov 7, 2008

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


Discover the power of Dmat+Online trading account:
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.

SBI Demat Account

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 :


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Sep 4, 2008

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