Demat stands for dematerialization where the documents are held in the soft copy format and no paper is used. The day when the market regulator decided to have the end of use of papers the Demat account has been made mandatory for every trader as well as investor whoever wants to deal in the share market. The authority to open this account lies with CDSL and NSDL only,and no other institute is allowed to offer a demat account. The demat account is the short form of dematerialized account which is a digital and paperless form of buying and selling the stocks as well as other financial instruments. The demat accounts have been made compulsory for trading stocks in our country. The trading account helps in buying and selling of the securities and can be opened with any brokerage house.
If you are into trading and looking for opening the best demat trading account in India, keep the following points in mind for availing the best services:
- Brokerage, fee and other charges
The brokerage is a charge that you pay on every buy and sell. It usually charges in a fixed amount or percentage term. There are separate charges for trading in mutual funds and derivatives. The annual fee is charged once a year for the services of the broker. Explore various available options and avoid committing the mistake of over-paying.
Though the majority of the people open the demat account considering only brokerage charges, the technology should not be ignored. Since the demat account operates online, you need a good platform and consistent services. The platform should be easy to use and not remain down while trading.
A good platform should also offer other features such as:
- Real-time price of various stocks
- Create a watch list to track favorite stocks, prices, and events.
- Financial data, important events, history as well as analysis of the company
- Cost of portfolio along with the current value of the portfolio
- Buying and selling history for any period
- Overall gain/ loss as well as on individual stock
- Bid and ask price of the securities
- Information on annual gain and loss doe tax purpose
Important tips to keep in mind:
- Investment involves your savings thus make sure to have complete control on the transactions and investments. Explore various broker websites and choose the best option available.
- It is recommended to open a new account solely for the purpose of trading as it will help in tracking your gains. Using an existing account will make it difficult to track because the account will have other transactions as well apart from the buying and selling of shares.
- The demat account should offer instant updates and information about the stock market.
- Last but not the least, avoid being obsessed with the changes in price as they are momentary and will change every minute. Explore various options, make a good long-term investment and wait patiently for their prices to grow.