You cannot ignore the importance of a Demat account for trading. A trading account can only help you buy and sell securities on stock exchanges and financial markets. It can be of no help in holding securities for a given period. To hold securities, you must transfer them to a Demat account.
A Demat account works on the principle of dematerialisation – a process of digitising physical securities for safe storage. A Demat account eliminates the theft risk, as there are no physical certificates to monitor. There are several Demat account providers in the market, and choosing one is challenging. Here are the tips for selecting the best Demat account provider in India.
Choose a Broker
Depository participants and stockbrokers are authorised to distribute new Demat accounts to investors. However, depository participants do not offer a trading account with a Demat account. On the other hand, stockbrokers offer 2-in-1 accounts. Both the Demat and trading accounts are coupled into a single account. It is beneficial to open both Demat and trading accounts with the same broker. By doing so, you can initiate a faster transfer of securities. All your trades will be settled in quick succession. Whether you choose a depository participant or broker, don’t forget to ask for the trading account facility.
Consider the Account Charges
Demat accounts come with a wide range of charges for investors. For starters, there might be a charge to apply for a new Demat account. Besides the account opening charge, you must consider maintenance, custodian, dematerialisation, transaction, and other fees. It is better to compare different brokers based on their Demat account charges.
To avoid the account opening charge, you can choose a reliable broker like Religare Broking Limited. They charge zero fees for opening new Demat and trading accounts.
Consider Data Analysis and Research Facilities
Research is essential to make informed investment decisions. Brokers usually couple Demat and trading accounts within an investment platform. The investment platform offers more than just access to securities on different exchanges. It offers research tools and reports to investors to make informed decisions. A new-age investment platform lets investors know the trends, market conditions, indices, and much more. There are numerous investment options available in today’s era. Choose a broker that can help you evaluate the performance of different securities and make informed decisions.
Ease of Opening a New Demat Account
You must choose a broker that allows you to open an instant Demat account online. Submit your Demat account application on the preferred broker’s website. It speeds up the process, and you have a new Demat account in no time. Don’t opt for brokers with a lengthy process to open a new Demat account.
The reputation of the Demat Account Provider
Do not forget to consider the reputation of the Demat account provider. The broker or depository participant must cater to the needs of investors. Besides a Demat account, it should offer services like margin trading, research, stop-loss, and zero-balance facility.
In a Nutshell
Reputed Demat account providers allow investors to apply for a new account online. Don’t forget to link your Demat and trading accounts for quick settlement of trades. Choose your Demat account provider right away!