A demat account is one of the prerequisites to online trading in the stock market. It is electronic storage for financial assets one holds in the stock market. Whether it is equity, bond, government securities, mutual fund units, or other securities, an individual can hold them in a single demat account.
Demat accounts are offered by brokerages. These are the registered firms with the Securities and Exchange Board of India (SEBI), Indian depositories – Central Depository Services Ltd and National Securities Depository Ltd, and stock exchanges to provide demat and online trading services.
The Best Demat Account For Online Trading
One should know that there are two types of stockbrokers in the broking industry – Discount Brokers and Full-service Brokers. Most investors prefer to choose a discount broker to open the best demat account. Following are the supporting reasons that make most investors consider reputable discount brokers for demat account opening and starting their online trading journey:
- Ease of Creating an Account Online Using Technology
In the digital era, leveraging technology, leading stockbrokers allow investors to open a demat account online and provide an online trading app. Individuals can open a demat account through the e-KYC (know your customer) which simplifies the account opening process. The whole process of account opening can be authenticated using the investor’s Aadhaar data. For final self-identification steps, they can record a short video or schedule a video call for in-person verification.
- Ensured Security
There are certain safety standards that stockbrokers need to meet to ensure the security of their client’s data. Discount brokers are aimed at providing the best demat services to their clients. Therefore, they keep invested in their technological advancements and serve their clients with the best demat services and online trading platforms.
- Zero Demat Account Opening Charges
While most full-service stockbrokers charge an account opening fee, discount brokers allow individuals to open an online demat account for free. One can open a demat account following a 100% digital process without paying a fee.
- No Annual Maintenance Charges (AMC)
Most investors are concerned about demat account charges. One of these is AMC. It is an annual fee that brokers charge to maintain investors’ demat accounts. Renowned discount brokers offering affordable subscription-based brokerage plans do not levy AMC to their clients.
- Save on Demat Credit Transactions
When a demat account holder invests in financial securities, these securities are credited to their demat accounts. Similarly, when they sell their demat securities, their demat accounts get debited. Investors need to pay for both sides’ transactions. With discount brokers, investors can save on credit transactions.
- Open Demat and Trading Account Together
A trading account is another account required for online stock trading. This account is linked to stock exchanges and facilitates investors to place online trades using the broker’s online trading platform. If investors want, they can open both accounts together online using a single application form. If further makes online trading hassle-free. Also, there is the benefit of unbiased brokerage charges. Individuals can enjoy flat brokerage charges with a discount broker irrespective of the trade volume.
- Quick Activation
Demat account opening is just a matter of 15-20 minutes with e-KYC. With technological advancements, discount brokers offer an instant account activation facility to their clients. It is quick as there are no hefty documentation requirements or personal visits to the broker.
Thus, discount brokerage firms are popular among retail investors for their demat and online trading services. They have rapidly gained popularity with the advantage of cost-efficiency and high-speed trading services. Approach a renowned discount brokerage firm to open the best demat account for online trading.
