A Dematerialized (Demat) account stores all your securities like commodities, ETFs, etc. in an electronic format. It is not possible to trade in the Indian stock market without a Demat account.
Today, opening a demat account in India is done in just a few clicks. Easy, convenient and effective,
any budding investor can start their journey in the world of financial markets by opening a demat
account.
A dematerialized account, otherwise known as a ‘Demat Account’ where you can keep digital forms of all your securities traded on the stock market such as commodities, ETFs, etc. You cannot trade in the Indian stock market without having a Demat account. In India, two primary depositories hold your Demat account: the National Securities Depository Limited (NSDL), and Central Depository Services Limited (CDSL).
Opening a bank account with any banking service that has been verified by the Reserve Bank of India (RBI) is a service available to any Indian citizen. However, for those who have maintained their Indian citizenship but reside out of the country;
For decades, trading in the financial markets has remained a prime lucrative opportunity for various investors across India. Today, with the advent of modern, online trading platforms and tools such as the efficient demat account, trading has become even more lucrative than ever.
Demat accounts are fairly similar to bank accounts. However, the key difference is that they hold securities and financial instruments instead of money. These accounts have become the preferred method of storing securities and are regulated and maintained by depositories such as the NSDL or CDSL in India, and traders generally avail their services through brokerage firms..
To invest in shares, bonds, mutual funds and other varied financial securities, it is mandatory to open
a Demat account. It is also important to note that any profits booked by you by selling shares in your
Demat account are liable to tax. That is why you need to be aware of tax implications on your Demat
account according to the provisions of the Income Tax Act 1961.
Non-Resident Indians (NRIs) can invest in equity, equity derivatives, IPOs, Mutual Funds, and bonds in India. However, they are not permitted to trade in commodities, or carry out intraday trading, as per government regulation.
The world of online trading has become increasingly more accessible and convenient for both new and seasoned participants in financial markets. Today, traders and investors can execute and manage trades at lightning-fast speeds, at any time. Online trading has become so prevalent that an increasing number of people today dabble and even make a living with the high-speed world of intraday trading.
As part of an introduction into the world of holding and trading financial securities, one of the first things you’ll need to do is open a demat account, and understand the various charges associated with doing so, as well as the exact benefits received through the same.