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| June 13, 2022


Many people nowadays are looking for investment options that are lucrative and can multiply their earnings over time. The Securities and Exchange Board of India (SEBI), which is the regulatory body for the Indian securities market, has made significant changes over a period of time in shifting the overall shifting process from physical to digital. Now, it takes just a few clicks to open a Demat account to buy and sell shares. Almost every other person has a bank account today that lets them deposit or withdraw money. A Demat account works similarly to a bank account that lets you hold your securities in an online form. A Demat account also lets you transfer shares from one Demat to another to help you consolidate the number of shares you own and get an overview of all the shares. Before getting into how to open a Demat account online, here is what a Demat account means and its types.

What are Demat Accounts?

Prior to 1996, in India, trading used to take place in physical format by transferring securities in the form of certificates. In 1996, the Securities and Exchange Board of India introduced Demat accounts which have currently revolutionised into a digital process. Demat or dematerialisation is a process by which physical securities are converted into digital format. By opening a Demat and trading account, a person can easily buy, hold or sell securities without having to deal with physical securities. The use of Demat accounts is primarily for investing in shares and securities in an electronic format that is more safe, quick and efficient than traditional formats. A person can not trade in stock market securities without opening a Demat account.

Types of Demat Accounts

Demat accounts are broadly classified into three types offered by depository participants. Based on your residential status, you can open a free Demat account with no annual charges that fit right for your investment and trading purposes.

Regular Demat Accounts

An Indian citizen can open a regular Demat account to deal with equity trading and investment in an electronic format.

Repatriable Demat Accounts

As the name signifies, repatriable Demat accounts can be opened by non-resident Indians to transfer their money overseas.

Non-Repatriable Demat Accounts

Non-repatriable accounts are also meant for non-resident Indians where one cannot transfer the funds outside the country.

How to Open A Demat Account?

To open a Demat account, the person needs to be of minimum 18 years old or will require a legal guardian if not meet the age criteria. Here is the quick and simple procedure for opening a Demat account.

1. Choose the Depository Participant

Firstly, one must choose a depository participant that can be any licensed bank or financial institution with whom you want to open a Demat account online.

2. Fill in the details

Fill out the online form for opening a Demat account by entering the necessary details like your name, contact number, email address etc.

3. Submit supporting documents

Thirdly, you need to submit identification proof documents like PAN card, Address proof, ID proof and bank details through which you wish to make transactions.

4. Complete the KYC process

Next, get your KYC details verified online. After a few days, your Demat account will be ready to make transactions.

5. Get a unique client ID

Once your account is ready, you will receive a unique client ID which will allow you to gain online access to your Demat account.

Why Demat Account is a Must?

A Demat account is a simple and online way to secure your shares and assets. Just like a regular bank account, you can buy or sell shares easily through a Demat account which will be debited or credited from your Demat account once the deal is authorised. Opening a Demat account is a necessity for every investor since it allows them to not go to the physical stock exchange for a deal. One can open a free Demat account with no annual charges and can save money on transaction fees since there are no stamp duty fees involved in the transfer of shares. The benefits that operating a Demat account provides to an investor encourage them to trade more frequently and help build possibilities for profits.

Nowadays, opening a Demat account with your preferred Depository Participant has become a fair and easy deal which also safeguards you from tapism, fraud, theft and displacement. Muthoot Finance is an Indian financial corporation that gives you the best benefits of opening a Demat account to transfer your funds without any hassle or delays instantly. With minimal documentation and to hold your securities online conveniently, Muthoot Finance lets you open a Demat account online and allows you to access your Demat account easily from anywhere. Visit your nearest Muthoot Finance branch to know more.

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