You Must Check It Before Opening A Demat Account

For an individual, there are not many avenues open for side income in this era. Among the available avenues, the leading one is the stock market. One can jump in the stock market and start trading with the help of which he can make money, but it is also not that easy as one need to have knowledge for the same. There are also some requirements that he needs to fulfil, and after that only he can start trading. Though the requirements are not so large and hence one can fulfil them easily.

You Must Check It Before Opening A Demat Account

The requirements:

As far as the requirements in these segments are concerned, he needs to have a demat account and a trading account. To have the best demat account in India, there are some brokers whom he can check. Many of the stockbrokers also offer a free demat account with a few conditions. Here one must know that the demat account carries only an annual maintenance charge which is also not so high and hence rather going for free account check the terms and conditions first so that one can know if he will have to face any conditions in future.

Basically, the demat account is one where the stocks which are in dematerialized form now can be parked. They are the stocks that are purchased for the purpose of long-term holding, and hence one needs to hold them in an account. The demat account performs this responsibility. It is an account provided by only two main authorities in India. Another account one needs to have is a trading account where the daily trading of purchases and sells happens. As per the SEBI, every trader can trade in the trading account only and hence those who do not have a trading account need to get it opened.

The transactions:

The trader needs to furnish the required documents to the service providers to open the account. These documents include an identity proof, address proof, cancelled cheque and PAN card of the trader. Within a specific period, one can find the account opened. He needs to fund the account to start trading. It can be any amount as per his strategy and on the amount deposited, he is provided with credit by the service provider with the help of which he can start intraday trading. However, in the delivery trading, the system is different, and one needs to fund the account to the extent of the prices and value of the shares purchased.

The cash segment is one where the client has limited risk of loss, and if it is the delivery trading, then there is no chance of loss also in short run. However, in the delivery based trading, the client has to keep the provision of large money amount as it is an investment and not trading. The delivery based trading can also have some more benefits such as splitting of shares, increase in rates and also bonus shares as well as dividend but they are possible only if the company offers them to the shareholders.

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