Need A Demat Account? Here's What You Should Know

A demat account holds financial instruments digitally and provides you instant access to your investments through a web application or a mobile app. However, gather enough knowledge and information about a demat account and its working before opening a demat account. It will help you make the best use of available demat services and enable you to manage your investments smoothly. Here are a few things that will clear your doubts regarding a demat account:

Types of Depository Participant

A DP or Depository Participant is an intermediary between the investors and the central depositories like CDSL and NSDL. NSDL (National Securities Depository Limited) is the depository for the stocks listed on NSE (National Securities Exchange). CDSL (Central Depositories Services Limited) is the depository for the stocks listed on BSE (Bombay Stock Exchange). Choose a DP who is registered with either of these depositories. 

A DP can be a bank or brokerage firm that offers demat services. Brokerage firms can be either full-service brokers or a discount brokers. Discount brokers levy a flat charge irrespective of the trade volume. They don’t provide research and advisory services like a full-service broker. However, some of them provide trading essentials, support services, and learning resources. If you have a fair knowledge and experience in trading, you can avail of their services and save much on the brokerage. kcp share price

Full-service brokers offer access to research and advisory services. You may benefit from the services of a full-service broker if you have no experience or knowledge of trading. However, they charge a percentage of your trade volume as brokerage. It means that a significant portion of your profits would be spent on the brokerage if you subscribe to their services. 

Demat account types

A demat account means an account that holds your securities in dematerialised or digital form. Indian residents can open a regular demat account to invest in stocks, derivatives, currencies, mutual funds, and other market segments. A BSDA (Basic Services Demat Account) is a regular demat account. It comes with basic demat services and a zero or negligible AMC (Account Maintenance Charges). However, your investments can only be up to Rs. 50,000 to avail of the benefits of a BSDA. 

Foreign residents with Indian origin i.e. NRI (Non-Resident Indians) and PIO (Person of Indian Origin) can apply to an repatriable or non-repatriable demat account. A repatriable demat account can be opened only if you have an NRE (Non-Resident External) account. It helps to repatriate your stock market earnings to a foreign account seamlessly. A non-repatriable account does not provide this facility. Also, you need a NRO (Non-Resident Ordinary) account to open it. 

User-friendly trading platform & learning resources

A user-friendly trading platform is required to buy and sell securities seamlessly. Even discount brokers provide strategy builder tools, technical indicators, and other trading tools that elevate your trading experience and increase your profits. 

A DP must also provide access to learning resources through which you can gain more knowledge on different types of financial instruments and trading concepts. You can also go for the DP that offers a quick and hassle-free procedure to open a demat account online

Quality of support services

You can choose a DP as per your trading expertise and requirements. Apart from brokerage, you can also check their customer support reviews and market reputation, before opening a demat account. The customer support service offered by a broker is crucial as the quality of support services can impact your overall trading experience. For example, if the interface lags or the pages load slowly, you cannot trade smoothly. The support team must respond to your issues and fix the bugs promptly to help you trade without any inconvenience.