Earlier the shares were allocated on papers but after the dematerialisation happened the shares were allocated through the Demat account. Let’s know more about Demat account charges and what documents are required for the same:
What can a Demat account hold?
It helps to streamline the process of stock trading by removing superfluous paperwork. You can hold a number of investments in an easy manner when you have a Demat account.
Documents necessary to start a Demat account
You’ll need a few papers to make the process of creating a Demat account as simple as possible. Below is a list of documents that must be submitted.
- Photo identification is required. Aadhaar card, PAN card, voter ID card, driving license, and so on.
- Proof of residency – lease agreements, driver’s licenses, passports, landline phone bills, energy bills, apartment maintenance bills (if applicable), copy insurance, gas bills, and so forth.
- The bank’s passbook
- Paystubs or taxes as proof of income (mandatory for the currency and derivatives segment)
What is the cost of opening a Demat account?
Numerous stockbrokers, such as brokers, have been licensed by the Depository institutions, NSDL, and CDSL to provide superior Demat account opening services to customers. To open these accounts, they charge Demat account opening fees, which vary by participant. However, because the charges have numerous titles, investors may be confused about which charges apply to their Demat account. Here’s a quick rundown of the details of each service to help you understand how much you’ll be charged for your Demat account.
- Account opening fee: An account opening fee is a one-time cost levied by the stockbroker when the Demat account is opened. The cost is one-time-only and will not be charged again.
- Annual Maintenance Charges (AMC): An AMC is an annual fee imposed to maintain your Demat account, regardless of the number of transactions you do each year.
- Dematerialization of share certificates: It is the process of transforming physical share certificates into electronic records for which a fee is charged.
- Rematerialization of share certificates: Rematerialization is the process of converting electronic share records into physical ownership certificates. A cost is charged for rematerialization, just as it is for dematerialization.
- Redemption: Returning your mutual fund units to the fund company is the redemption process. The majority of depository participants levy a one-time fee for each redemption request.
- Postal Fees: Depository participants charge postal fees to physically deliver papers and statements of account to you.
This is all you need to know about Demat account meaning Once you have understood everything it is now safe to start trading. Before an investor can begin trading, SEBI has made it obligatory to open a Demat account. The account has various advantages over the physical system and better protects investor interests. If you want to open a Demat account, a broker has the most affordable Demat account opening fees. To open a Demat account in a matter of clicks, go to the broker’s website or download the broker’s market app from the app store. Broker’s trading software and platform offer a wealth of features to help you trade more effectively.