As per SEBI mandate, you require Demat and trading accouns to invest or trade in stock market securities. Stock market securities include shares, bonds, mutual funds, etc. Demat and trading accounts facilitate intraday trades, margin trades, derivative trades, and stock market investing. Demat means holding securities in ‘dematerialized’ or digital form. A trading account, on the other hand, is imperative for transacting in secondary markets.
If you don’t know Demat meaning or how to create a Demat account, you may use web search engines to access various websites providing information on the same. In this article, we will explain how to create a Demat account and trading account quickly.
Demat and trading account opening process
1. Select a broker
Nowadays, many online brokers offer Demat and trading account services. You may visit the websites of prospective brokers and do a comparative analysis on various parameters. These are trading fees, Account Maintenance Charges (AMC), subscription plans, customer service quality, value-added services, online trading platforms, etc. Accordingly, you may choose a suitable broker.
Transaction costs are one of the primary criteria for evaluating a prospective broker.
Some reputed brokers allow you to open Demat and trading accounts online for free. The Demat account AMC charges for the first year of subscription may also be waived.
Most brokers either follow a flat-fee or volume-based pricing model. Under the former, you will be charged a fixed fee irrespective of trading volumes, whereas, under the latter, your brokerage costs will vary as per trading frequency and volumes.
Plus, if you choose a full-suite broker, then the commission charges will be higher than that of discount brokers. It is because, unlike discount brokers, full-suite brokers offer research and advisory services apart from the execution of buy/sell orders.
2. Step-by-step guide
Step 1: Visit the chosen broker’s website. Fill out the Demat and trading account application forms and provide all mandatory details.
Step 2: Provide bank account details. Your Demat and trading accounts will be linked to your bank account.
Step 3: Choose a subscription plan as per your current needs. Usually, brokers offer exclusive plans for novice and seasoned traders. As you gain sufficient trading experience, you may upgrade yourself to higher-order subscription plans with advanced features.
Step 4: Upload scanned copies of identity proof, address proof, PAN card, and a canceled bank cheque. A valid passport, election ID, ration card, Aadhar card, driving license, etc. are some documents that can be used as identity and address proofs.
Step 5: Record your video reading out a given script aloud, directly at the recording window. You can also upload a pre-recorded video. This step is compulsory for in-person identity verification.
Step 6: Read and accept all terms and conditions. Affix an e-sign therein through your Aadhar number. An OTP will be sent to your registered mobile number stated on the Aadhar card. Once the OTP validation is done, you can verify your forms and finally submit them along with the supporting documents online.
Now, your onboarding process is 100% complete. You will receive your login details and unique Demat and trading account numbers from the broker shortly. Thereafter, you may immediately start trading in the stock market.
Final words
Online application is the quickest way to open Demat and trading accounts in India as it is a simple and paperless process. The entire process usually gets over within 10-15 minutes with a few clicks if you have soft copies of requisite documents ready beforehand. You may also check Demat meaning and how to create a Demat account and trading account on your selected broker’s website before initiating the process.
In other words, you can experience a seamless stock trading and investing experience with easy online Demat and trading accounts application process.
Also Read:- Initial Public Offering – Meaning and Buying Procedure of It?
