Having A Demat Account? Look For These Four Things To Avoid Losses!
Dematerialised or demat accounts are those accounts wherein you can hold all your market securities in the electronic form. A demat account is rightly known as the passport that enables you to invest in the Indian stock market. Investors need demat and trading accounts to hold and execute market trades, respectively. These accounts make the process of investing both convenient and straightforward. However, as a trader, you must exercise due diligence while operating your account. If you already have a demat account, here are four things you can do to avoid any losses.
Validate the credit of securities into your account regularly
Each time you purchase any securities, the instruments are credited into your demat account. It typically takes two working days after you've executed the trade (known technically as T+2 days) for the securities to be credited into your demat account. As such, you must ensure that the shares are credited into your account, two working days after the trade is executed. However, you should know that sometimes it takes more than two working days, for instance, in the event of an auction owing to short delivery. In such a case, you need to confirm with your DP about the date when the securities will be credited into your account and follow up with the same.
Understand the risk of keeping your shares in the pooled account
Sometimes traders ask stock brokers to hold shares in the pooled account so that they can save on some demat transaction charges. As such, it is integral that you get the shares credited to your demat account first. It will safeguard you from any unauthorised transaction in your shares.
Consider the costs associated with holding multiple Demat accounts
Brokers typically advertise free demat accounts to acquire customers. However, they levy several charges once the account is opened. For instance, account holders have to pay annual account maintenance fees. They are also charged sell transaction charges each time shares are debited from the demat account. As such, it is better to avoid holding multiple demat accounts. If you wish to open more than one demat account, try to restrict yourself as per your actual need. Your costs of maintaining can increase with every demat account you own. You can opt for a Basic Services Demat account, especially if the value of your investment portfolio is less than ₹200,000.
Avoid leaving signed DIS leaves with your broker
The demat account comes with a debit instruction slip (DIS) booklet. This booklet is like a cheque book on which you need to enter the details of the shares you want to sell. Many investors often leave this DIS booklet with signed leaves with their brokers. However, this act could result in acute consequences, especially if the booklet falls into the wrong hands. Instead of leaving the DIS booklet with your broker, you should sign the leaflet on need basis.
While handling your demat account, think of it as your savings bank account. The account holds all your securities or share market assets in the electronic format. As such, it is always better to exercise caution and remember the points mentioned above while operating your demat account.
Disclaimer: ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.