If we talk about the term , this is mainly the kind of investment. The investment is either in the debt or the equity to make profits. To do the investment in any securities, a person must have to open a particular account called the Demat account.
What is a Demat Account?
A Demat account is mainly a digital platform where a person can keep records of all the stocks. Not only the stocks, but even a person can also keep the mutual funds, gold bonds, government securities in the Demat account. To open a demat account; a person will have to pay a minimal sum of money. Once opened, the person can use the account for a lifetime.
When a person buys the shares in the trading account, he is paid within two business days after the transaction date. On the other hand, in the case of selling, it takes just a single day to get the amount debited from the Demat account. These accounts act as the bank statement where all the investments are kept safe.
Guide to open a Demat account
If a person is planning the trading securities, he must have an idea regarding the procedure to open the Demat account. The procedure is quite simple that even a beginner can follow easily. Let us discuss in detail the steps:
- Make the selection of the depository participant
Depository participants are mainly the agents or the registered stockbroker of the depository. The depository holds the investors' securities in the form of shares, debentures, and government securities. They are mainly the links between the companies that issue shares and their shareholders.
The first step that the person will have to follow is to select the depository participant. The selection can be done based on the needs and the specifications of the person. He can select the best depository participant through the banks, stockbrokers, and other online platforms.
- Fill out and submit the Demat account opening form.
After selecting the depository participant, the person will have to visit the website. Here he can fill out the form to open the demat account. Some of the platforms even provide the option to open both the trading and the demat account simultaneously.
- Fulfill all the KYC requirements
Once the Demat account application is completed, it is time to fulfill all the requirements of know your customer. It will include all the copies of the scanned document like identity proof of the address, bank account statement, and income proof.
- Complete with the verification procedure
After completing the KYC details, the person will have to go through the In-Person Verification Process (IPV). This is one of the essential steps to check the documents' validity. Some of the depository participants provide the IPV using the online mode like webcam or the Smartphone.
- Sign all the agreements
Without signing the agreement, the account formation procedure will not be completed. Here the person will have to sign the with the depository participant that you have selected.
- Get the ID
This is the last and the final step. After signing the agreement, you will receive a beneficial owner identification number when your application is approved. The complete access of the Demat account will be done through this number.