Those who were trading in the equity markets prior to 1997 would vouch for the disadvantages of the physical delivery and settlement system. Shares were lost in transit, there were signature mismatches, there was the risk of bad delivery and above all you had little control after the share certificates were given to the broker. All that changed with the introduction of demat in 1997. Today over 99% of all holding and 100% of all settlement happens in demat form. As an investor you might be confused on how to choose the best demat account as you have the choice of a larger number of depository participants. Here is a check list of factors you must consider and ask yourself before opening a demat account:
What is my total cost of operating the demat account?
The costs may appear to be small in isolation but can add up substantially over a period of time. Ensure that your depository participant is able to offer you a low account opening cost as well as a low maintenance cost. These will go a long way in reducing your overall cost of operating your demat account.
Is there a seamless linkage between trading, banking and demat?
This is an important question you need to address. You want the entire process of executing transactions in your trading account; debit to your bank account, credit to your demat account, debit to your demat account and credit to your bank account to be seamless. This goes a long way in helping you plan your liquidity when you buy or sell shares.
Is the DP offering you online demat execution?
You surely do not want a situation where you need to sign and submit a Debit Instruction Slip (DIS) physically each time you make a sell. It creates a problem in terms of availability of DIS, maintaining your DIS in a safe and secure manner as well as avoiding problems of misuse of your DIS. All these problems can be obviated through online demat facility which does away with physical intervention in totality.
Remember, DP does not have custody of shares, it is the Depository…
Remember, your shares are vested with one of the two institution sponsored depositories viz. NSDL and CDSL. When you open an account with a Depository Participant (DP), they only facilitate your transactions on behalf of NSDL or CDSL.
Today a demat account offers the facility to hold a broad spectrum of financial investments in a single account including equities, bonds, ETFs and even mutual funds. This enables you to control all your investments with a single login.
Benefits of opening an online Demat account with Religare Online:
Religare Online offers you the best Demat Account experience through some unique advantages like zero account opening charges, free AMC option for 1st year, seamless online interface etc. Religare Online offers tools like Star Ratings – A stock market analysis tool that provides stock trading tips, TechScan – A technical analysis tool that helps you get unique trade ideas, analysis on investment opportunities and monitoring of your stocks; Power FnO – Real time price analytics and trading platform retail traders in Derivatives Market etc.
As a reputed part of the Religare Group, you get the added benefit of all your financial needs met and catered under one roof with the able guidance and assistance of financial advisors. In addition, Religare also offers you analytics on your demat account, which help you analyse trends in your holdings and wealth shifts. Surely, a choice for you to seriously explore to meet your all your investment needs!
Click here to open your own Online Demat Account.