Things to Consider While Opening a Demat Account

A demat account is a must, if you want to trade in equities, stock markets, or securities. It is considered as the equity equivalent of a bank account. As your bank account holds your cash, the same way the demat account holds your shares in custody. It’s quite easy to open a demat account but choosing the right service provider for it is not as simple, especially when you are a beginner. In this article, you will explore plenty of things you should keep in mind while opening a demat account. Additionally, you can learn a bank nifty option strategy to make a good return on your investments.

1. Account Opening Charges

Everyone wants to save money for things that can be settled by sitting at the table. You must have seen a number of ads that offer free trading accounts or when you ask to open your trading account with a broker, your account can be opened free of cost. However, you shouldn’t trust these ads or freebies blindly, as there is a possibility of hidden charges. The broker may ask you to pay the maintenance charges annually or set fixed charges on each transaction. So, you should make it clear to the broker about all the charges.

2. Same Broker for Demat and Trading

Usually, the brokers open your trading-cum-demat account in one go. The issue is faced when your broker does not have a DP license. Then you need to submit the DIS (debit instruction slip) to your broker timely, once you sell shares with your broker. If you fail to submit the DIS in time, then it can lead to bad delivery and losses. But when the DP and broker are the same, this complete procedure becomes very simple and seamless.

Also, you can select online demat and trading so that your broker gets the power of attorney to debit the demat account in case of sale. And he can credit the demat account in case of purchase. This way you can save yourself from a lot of inconvenience.

3. The User-interface of Your Account

A trading account is utilized to buy and sell stocks. You should be able to check your trading transactions easily whenever you want. So, you must check the user interface of your trading account, if it’s user friendly or not. Also check if you face any technical problems when checking your transactions, stock prices, bank details, and many other important things.

4. Trading Platform Features for Account

You should check the trading platform features of your account like what additional features it provides other than basics. In this time of digitalisation, you will be using your trading account yourself on your computer or smartphone. Hence there should be market data, live feeds, stock prices, and other important information.

5. Restrictions in Number of Transactions

You need to check if there is a limit in buying or selling or the number of transactions that you make. There is a possibility of limitations on using the trading account just like an additional feature. There are some brokers that offer loans on shares while some provide pledging facilities. There is a possibility of restrictions on these things in your account. So you should inquire about all these things before opening a demat account.

However, it is very rare for most brokers to have such limitations, except, when any action is taken by the SEBI (stock exchange or regulatory authority) in India. You should also check or confirm how much margin your broker is offering for intraday trading or short-term trading. You can also learn the best intraday strategy so that there is a low chance of loss.

6. Other Features Offered by the Broker

When you open a trading account with any broker, you need to get the most out of the common features while buying and selling the stocks. However, there are some brokers that offer additional features to their customers via their trading accounts. All you need to do is check and compare the features of a trading account with other brokers. You can find the one that gives the maximum features at the lowest prices.

There must be a quick and convenient option to buy or sell stocks from all the prominent stock exchanges with their current data. Also, you should confirm if your broker is charging extra for these features.

7. Secure Transactions

It is also one of the most crucial factors you must consider or thoroughly check before selecting a broker to open your trading account. It is extremely important to keep your investments safe and protected from any kind of unauthorized access. In this era, there is excessive use of digitalisation, hence there is a rise in the level of cybercrimes. Which makes it more necessary to be careful about your demat account.

So, please always check the security of your trading account, for example the account login verification procedure, accessibility to your broker end, and the trading platform that will be used to run your trading account is safe and protected from cyber fraud. While opening the trading account, always check the security layers for a safe trading experience.

8. Customer Support Service for Help

You must check the customer support offered by a company while using their digital services. Hence you must check the feedback of people and integrated facilities of customer care services. You can check if it’s available via chatbots, or if there is human conversation. Also you can visit the nearest branch of the company to resolve your queries related to trading.

In the stock market customer service support is very crucial. You can ace stock market trading if you get quick responses to resolve your issues and queries. It’s very important that your broker provides a calling facility and gets quick online assistance. Any type of delay can make you lose money in the stock market.

The Bottom Line

Opening a demat account is a very quick and easy process, but it does require being aware of certain factors. You need to choose the right DP and account type based on your trading needs. You should also understand demat account charges, user interface, features, restrictions, security, and customer care services.

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