Like a bank account. Similarly, a demat account also works like a bank account. SEBI, which regulates the stock market, has clear instructions that shares cannot be bought and sold in any other way without a demat account.
The best thing about Demat account is that it can be opened even with zero account balance. There is no need to maintain a minimum balance in this. To invest in the stock market, the investor should have a bank account, trading account and demat account, because in the demat account you can hold the shares digitally. So, with the help of a trading account, investments can be made in shares, mutual funds and gold.
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How to Open Demat Account
Demat account is the most important thing to invest in shares online. You can open it with any brokerage like HDFC Securities, ICICI Direct, Axis Direct.
After taking the decision of the brokerage firm, you go to its website and after filling the demat account opening form carefully, complete its KYC process.
Documents will be required for photo ID proof, address proof for KYC. When this process is completed, then in-person verification will take place. It is possible that the firm from which you are getting the demat account opened, they should call the office of their service provider.
After completion of this process, you sign a term of agreement with the brokerage firm. After doing this your demat account gets opened.
You will then be given a demat number and a client ID.
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who will open demat account
Two institutions do the work of opening a demat account in India. In which the first is NSDL (National Securities Depository Limited) and the second is CDSL (central securities depository limited). More than 500 agents work for these depositories, which are also called DP in common language. Their job is to open a demat account.
prerequisites
The most important condition for opening a demat account is that the person who is opening a demat account for share trading should be above 18 years of age. Also, for this, it is necessary for that person to have PAN card, bank account identity and address proof.