Investing and trading have changed significantly in the past decade. From crowded trading floors to trading apps, technology has made it easier for traders to invest and manage their portfolios. One essential element of trading in the modern world is a demat account. A demat account is an electronic form of holding securities such as shares, bonds, mutual funds, and Exchange Traded Funds (ETFs). Demat accounts are mandatory for Indian stock exchange trading. In this blog, we will demystify the process of opening a demat account through a trading app.
Understanding Demat Account Basics
There are two types of demat accounts- Regular and Basic Service Demat Accounts (BSDA). A regular demat account is for those holding a large number of securities, whereas a BSDA is for small investors. A BSDA is beneficial for those without many securities, as the charges are low.
Why do Traders Need a Demat Account?
Earlier, investors held physical share certificates, which made it difficult to transfer or sell them. Moreover, there was a high chance of losing these certificates. A demat account opening has made it easy for investors to hold securities in digital format. It eliminates the need for physical share certificates, provides easy access to securities, and facilitates buying and selling securities quickly and effortlessly.
Step-Step Guide to Opening a Demat Account through a Trading App
The first step is to research and choose a trading app. There are many trading apps on the market such as Zerodha, Angel Broking, and Upstox, among others. It is essential to go through each app’s features, charges, and feedback from existing users before making a final decision. One should opt for a trading app that offers a seamless user interface, excellent customer support, security features, and low trading fees.
Preparing the Required Documents and Details for Account Opening
Once you have finalized the best stock trading app, the next step is to prepare the necessary documents and details for account opening. Here are the documents you will need:
- Identity proof, such as a PAN card, driver’s license, AADHAR card, or passport.
- Address proof, such as a voter ID, utility bill, bank statement, or passport.
- A canceled cheque or bank statement.
It is recommended to keep scanned copies of all documents ready before proceeding.
Completed the Registration and Verification Process
After preparing the required documents and details, the next step is to register on the trading app’s website. Here are the steps to follow.
- Log in to the trading app’s website and click on ‘open account.’
- You will be prompted to enter your name, email address, and mobile number.
- After verifying your mobile number, you will be asked to enter your PAN card details and other personal details.
- The next step is uploading the necessary documents and a passport-sized photograph.
- After submitting all the details and documents, you have to e-sign the application digitally with an Aadhaar OTP or DSC (digital signature certificate).
- Once you complete the process, the trading app will review your application and approve it.
Tips and Best Practices for a Hassle-Free Account Opening Experience
It is essential to fill in all the details correctly to avoid rejection or account delay. A few common mistakes to avoid while filling out forms or uploading documents include:
- Mismatch between the PAN card name and the name on the AADHAAR card or bank account.
- Signature mismatch.
- Blurry or incomplete documents.
- Incorrect bank details.
Knowing the Charges and Fees Associated with Demat Accounts to Make Informed Decisions
Before opening a Demat account, it is essential to know the fees and charges involved. These include Annual Maintenance Charges (AMC), transaction charges, and other hidden charges. It is recommended to opt for a BSDA if you don’t have many securities, as it has a lower AMC than a regular account.
In conclusion, opening a Demat account through a trading app is simple and quick. By following the steps mentioned above and keeping the best practices in mind, you can open a Demat account hassle-free. It is essential to choose the right trading app that suits your needs and provides a seamless trading experience. So why wait? Get ahead, open a Demat account, and start investing in the stock market today.