Things to Know Before Opening a Demat Account
24 February, 2023
A Demat Account is an online platform that offers investors access to trading in the stock market. Moreover, a Demat Account offers a wide range of products and services, catering to the needs of all types of investors, and has become a popular choice amongst investors because of their speed, convenience, and safety.
Demat account services are offered by all major banks, mutual funds, and brokers in India. A Demat account is ideal for those investors who want to trade in the stock market but don’t want the hassle of physically going to a broker or dealing with paperwork. A Demat account also allows you to keep track of your investments and perform various transactions. You can create a Demat account in just minutes, with just a few documents and identity proof.
Factors to consider when choosing where to open a Demat Account:
Ease of use between your Demat and trading accounts: It’s important to select a provider that offers an easy-to-use platform that can easily be linked with the trading account you currently have. With HDFC Bank's 3-in-1 integrated account service, customers have the privilege of a Savings Account that is seamlessly linked with their Demat and trading account. They can hold, trade, and pay for a plethora of investments, including equity, derivatives, mutual funds, exchange-traded funds, and bonds and non-convertible debentures (NCDs) through their 3-in-1 Account. It's good to have a Demat and trading account with the same broker as transacting processes like issuing debit instruction slips, resolving issues around trading becomes easier as it can be resolved by the same entity.
Technology and software: It’s important to choose a provider that offers a user-friendly and technologically advanced platform. The trading platform should be easy to use and offer a range of features, including access to market data, news, and research reports. It should also have features that allow you to trade on multiple platforms (desktop, tablet, or mobile) at the same time. HDFC Bank Digidemat account is secure, time-saving, and easy to use. The account opening process is online and takes only minutes. Customers can get easy access to their investments via NetBanking. Customers can do multiple investments including mutual funds, equities, IPO, and ETF sovereign gold bonds through this facility.
Reputation of the depository participant: The reputation of the depository participant is very important as it will determine how your investments are handled. Spend time to do some due diligence on the depository participant's legacy and trustworthiness. If you choose a well-known and reputed DP, then you can be assured that your money is safe and secure. HDFC Bank has been trusted by over 3 million customers pan India and is one of India's leading private banks.
High-quality support: You should ensure that you have access to the best possible support for your investments. The depository participant should be able to provide you with 24/7 customer support, email, and physical address, as well as a helpline number. HDFC Bank provides offline support to its customers through more than 4000 physical branches. Customers can also find the live location of the nearest branch by typing 'Nearest DP branch' on Whatsapp number- 70700 22222.
Security: The virtual world is exposed to cyber-attacks and hackers are always looking for ways to steal your hard-earned money. The best way to protect yourself from such attacks is by using a secure depository participant that has strong data encryption and malware protection systems in place. The depository participant should have a strong security system in place to protect their money.
Charges: The charges for a depository participant should be reasonable and transparent. A DP should not charge hidden or unexpected fees and must offer a clear breakdown of the various charges that are applicable to your transactions. You should check for charges such as account opening, annual maintenance, and the transaction fee for specific trades.
Complaints pending against DP: It is important to check whether the depository participant has any complaints pending against it. If there are many pending complaints with SEBI, then it is best to avoid using that DP. Check social media forums, regulatory investigations, and negative feedback against the DP before choosing one.
Digital access: It is important to check whether the depository participant offers digital access to its customers. It should have an online portal where you can view your holdings, transaction statements, portfolio, and other details about your account.
Product range: It is important to check the range of products offered by the depository participant. It should have a wide variety of products and services that are suitable for your investment needs and goals. Ideally, a DP should offer a bouquet of services including stocks, derivatives, fixed-income products, Government of India bonds, mutual funds, the National Pension Scheme, insurance, etc.
Paperless account opening: The DP should have a paperless account opening process that can be completed online. It should also provide an option to sign-up for SMS alerts and email notifications.
Certified professionals: The DP should have a team of certified professionals including investment advisors, portfolio managers, and financial planners who can offer advice on investing in different asset classes. These experts should regularly monitor your investments. The depository participant should also provide an option to get alerts on the performance of the portfolio and send out reports from time to time.
Availability of mobile apps: The depository participant should provide an option to sign-up for their online services and manage your account using a mobile app. The DP should also have apps for both Android and iOS devices. This will help you access your accounts from anywhere, anytime, and on any device.
It is important to check the above-mentioned points before choosing a depository participant. It will help you understand whether the DP is suitable for your needs or not. As an investor, it is your responsibility to choose a reliable and trustworthy depository participant so that you can make the most of your investments.
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Learn the Difference Between Demat Account and Trading Account Here.
*Terms and conditions apply. This is an information communication from HDFC Bank and should not be considered as a suggestion for investment. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.
