loader2
Partner With Us

Things to check before opening a Demat account

A Demat account is crucial for trading in equity. It is equivalent to a bank account, which shows the movement of shares bought and sold. The Demat account is easy to understand and read, but there are specific questions that you may have before opening a Demat account.

  • Is there thing to be careful about while opening a Demat account?
  • What are the benefits or advantages of a Demat account?
  • What factors to consider while opening an active Demat account?

Keeping the questions in mind, here are some points for your consideration while opening a Demat account:

1. Make sure the Demat account and the trading account are with the same broker:

Usually, the broker opens a trading-cum-Demat account at once, so this question seems irrelevant. But it happens that the broker may not have a DP license. In this case, you must ensure that once the shares are sold with the broker, the person is required to submit the debit instruction slip (DIS) to the broker on time. Not doing so results in a bad delivery and, thus, losses.

When the DP and broker are the same people, the process is more straightforward and smooth. You can also opt for online trading and a Demat account and give a power of attorney to the broker for debiting and crediting the Demat account accordingly during buying and selling transactions. Having both trading and Demat account with one broker saves much of the hassles.

2. Check how robust is the Demat technology platform

Many brokers offer access to the trading account and the Demat account from a single platform. Due to this, the transaction procedure, including the transfer of proceeds, transfer of shares, and bank account funding, happens seamlessly. To make sure things are smooth, check beforehand whether the Demat technology platform is robust or not. Typically, the debit is reflected in the Demat account the next day in case of sale of shares and case of buying; the Demat account reflects the credited shares on T+2 days.

3. Always calculate the related Demat charges involved.

Account opening is just one of the many costs associated with the Demat account. The annual maintenance charge, billed each year, is based on the value shares kept in custody. Apart from this, every timeshare is sold and debited from the Demat account; the depository participant pays a charge to either CDSL or NSDL, which is also debited from your account.

Besides this, the DP charges an amount if you request for a physical document, statement of holding/ transactions or duplicate statement to serve a proof. The DP may charge you a penal charge if the DIS gets rejected due to technical errors.

4. Seamless booking, banking and custody

All the three broking activities, custodian and banking, can work smoothly if the broker is also a bank. The factor is less significant in terms of essential requirements. The advantage of this is that the fund can be loaded via RTGS, UPI, NEFT or any other authorized payment gateway. But many brokers charge a nominal sum for letting you use the payment gateway, so it ideal to use the RTGS, UPI and NEFT for the same.

5. Ensure the quality of support services is high

A DP should be judged based on how they provide ancillary services. Time taken for dematerializing the shares, automation of corporate actions credited in the Demat account, ability to deal with pledging, complaints, etc., all need to be considered.

6. Complaints pending against the depository participant

This tells you how passionate and honest is the DP about its service standards. Having complaints against the DP is not a good sign. Ensure that the DP does not have any regulatory investigations or complaints against him.

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.  Investments in securities market are subject to market risks, read all the related documents carefully before investing. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.

Most Popular

f
  • 15 Sep 2021
  • ICICI Securities

5 Most Popular Reasons for Switching Bank

In the beginning, you would hear from them quite often. But of late, you're noticing more and more signs that it's no longer working. We are referring to your relationship with your bank. Click here to read how to recognize the red flags in your banking relationship and why it might be a good time to end the bond.

  • 15 Sep 2021
  • ICICI Securities

How Intraday Trading Works? Detailed Ideas

Intraday trading in India has been gaining momentum of late. It is no longer the option of only trade pundits.

  • 15 Sep 2021
  • ICICI Securities

What is Intraday trading? A Beginner's Guide

With the advancement of technology and increased knowledge about the stock market, trading is no more a domain dominated by stock pundits.

  • 05 Sep 2021
  • ICICI Securities

Is it Good To Invest in Cyclical Stocks?

Akin to how the pedals of a cycle go up and down as it moves forward, the share price of certain stocks goes up and down in accordance with the economic cycles a country goes through. 

  • 05 Sep 2021
  • ICICI Securities

A primer on Fixed Maturity Plans

If you happen to have some surplus funds which you don’t need for a specific period, but you don’t want to take the risk of investing this money in the stock market, you can very well put this money in a Fixed Maturity Plan or FMP. 

  • 05 Sep 2021
  • ICICI Securities

How to Choose the Best Equity Mutual Fund

You must have heard a lot about investing in mutual funds. But before jumping on this trend you need to assess a mutual fund scheme according to your goals, investment horizon, risk profile, liquidity needs and many other factors to find a suitable match. 

  • 05 Sep 2021
  • ICICI Securities

A Beginner’s Guide to Monetary Policy Tools

The Reserve Bank of India has the incredibly crucial responsibility to formulate the monetary policy. The main objective of monetary policy is to control inflation and provide a conducive environment for the country's economic growth. 

  • 05 Sep 2021
  • ICICI Securities

Buying Penny Stocks and its Risks

There is a specific category of stocks whose prices are very low and they seem to yield exponential returns. But do you know that investment in such stocks could be risky? 

  • 05 Sep 2021
  • ICICI Securities

How to Choose the Best Debt Mutual Fund?

Debt mutual funds primarily invest in fixed income securities, which include money market instruments like commercial papers, corporate bonds, treasury bills, government bonds and other instruments.

  • 05 Sep 2021
  • ICICI Securities

Tax Saving Using Section 80D

“Make your life safe and get insurance immediately”. This statement was never more relevant than the times when the pandemic threatens to wipe off the population. 

Open an Account

Sign Up for Free

+91

Please use the mobile no registered with Aadhaar.

OTP sent to +91 1234567890

Didn’t received OTP? Resend

00:30

iciciDirect-money-logo
iciciDirectMoney-App

Get Research Backed Recommendations.

Download The app now

or Scan below QR Code To download app

QRcode