My Place Points finance Importance Of Having Demat Account: Working & Benefits

Importance Of Having Demat Account: Working & Benefits

Demat account makes stocks and f&o trading fast and convenient by helping you maximize your wealth and safekeeping. It eliminates the risk of handling the physical share certificates. It is essential to open a demat account if you are investing in the stock market. Earlier, share trading used to happen in physical form that involved handling physical share certificates, but there are numerous challenges involved in it. 

There are chances it may go missing or damaged. Due to the availability of interest and digital platforms, share trading has never been this much easier with the help of a demat account, which is used to store all your trading in electronic form. 

A Demat account is to store the shares, f&o trading securities you bought electronically. Even if you have physical shares, they need to be converted to electronic records before using a demat account. This process is known as Dematerialization. 

Importance of Demat account

You can hold numerous investments like equity shares, government securities, mutual funds, ETFs, and bonds. It is similar to handling a bank account; a demat account is credited and debited whenever you buy or sell shares online. It also eliminates all the unnecessary paperwork, and it makes the share trading process simpler. 

How does the Demat account work?

The investors can store all the securities or shares they own in electronic form in a Demat account. It is directly associated with NSDL or CDSL. You can access the stocks & future trading statement to look into the number of trading you performed, how much you made, and how many shares you bought or sold. The Demat account will be debited whenever you sell shares and credited if you buy the shares; it works just like your savings bank account. 

Documents required to open a Demat account to invest in f&o stocks, for the convenient and also hassle-free process of opening a Demat account, you should have some essential documents. Below is the compiled list of required documents.

  • Identity proof: You can provide your Aadhar card, voter ID, and driver’s license as proof of identity to open a Demat account online
  • Address proof: It is a proof of residence that should be submitted to open a Demat account; it can be your registered lease agreements, driver’s license, passport, electricity bills, phone bills, gas bills, insurance, and even apartment maintenance bills, can be given as address proof.
  • Bank account proof: The bank’s passbook, along with the account statement, can be provided. Usually, the share market broker’s app requires 3 to 6 months of bank statements as proof. 
  • Proof of income: You can provide payslips and taxes as proof of income to create an online Demat account. 


Always check whether the Demat account maintenance charges are economical before opening your stocks & options trading Demat account. And enquire about the account opening process thoroughly. It should be hassle-free, have a minimal documentation process, and be quick. 

Opening a Demat account involves many processes since it should be processed as per the SEBI guidelines. The DP should simplify it with the help of e-KYC and not trouble you by asking for a lot of physical documentation. It should also provide you with a seamless experience by providing fast transactions between the bank and the Demat account if you perform intraday trading. 

There will be frequent transactions of money, and DP should handle it. Ensure that you check all the factors and then consider opening a demat account with your DP.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Post