If you want to trade in Share Market. De-mat account is must. The market regulator, the Securities and Exchange Board of India (SEBI), has made it compulsory to open the De-mat account if you want to buy and sell shares in Indian share market.
So a demat account is a must for trading and investing in share market.
To open new De-mat account you have to approach a Depository Participant (DP) to open a De-mat account. Most banks are DP participants. A broker is a member of the stock exchange, who buys and sells shares on his behalf and also on behalf of his customers.
A broker can also be a DP.
Following are the documents required to open De-mat account:
When you approach any DP, you will be guided through the formalities for opening a De-mat account. The DP will ask to provide some documents as proof of your identity and address. Below is a list of documents out of which you have to submit one or two.
PAN card, Voter’s ID, Passport, Ration card, Driver’s license, Photo credit card Employee ID card, IT returns, Electricity/ Land-line phone bill etc.
Now you must be wondering, do you need any shares to open a De-mat account? Answer is, NO. You need not have to have any shares to open a De-mat account. A De-mat account can be opened with no balance of shares.
And also there is no restriction to maintain any minimum shares. You can have a zero balance (shares) in your account.
How much it cost to open a De-mat account?
The charges for Demat account opening varies from broker to broker of from DP to DP.
Generally some broker charge one time account opening fees but currently due to high competition they are offering free account.
After successfully opening the De-mat account you are ready to do buying and selling of shares in share market exchanges like BSE and NSE.
Important points to remember while opening on line De-mat account
1) Do multiple inquiries with various brokers or DP’s and try getting low brokerage charges.
2) Also discuss about the margin they provide for day trading.
3) Discuss about fund transfer facility. The fund transfer should be reliable and easy. Fund transfer from your bank account to trading account and fund payout from your trading account back to your bank savings account. Some on line share trading account has integrated savings account which makes easy for you to transfer funds from your saving account to trading account.
4) Very important is about service they provide, the research calls, Intraday or daily trading tips.
5) Also inquire about their services charges and any other hidden fees if any.
6) Check how reliable and easy is to contact them in case of any emergency, like buying and selling of shares on immediate basis or in case of any technical or other problems at your side while trading yourself.
7) You can also request to broker for demonstration of the trading terminal software and check how comfortable it is for you.
Showing posts with label demat. Show all posts
Showing posts with label demat. Show all posts
Friday, January 14, 2011
Wednesday, January 5, 2011
Process of Share Market
To learn about how you can earn on the stock market, one has to understand how it works. When a person want to buy/sell shares in the share market then he has to first place the order with a broker or can do themselves using online trading systems.
When you place the buy order, the message is transferred to the exchange [either NSE {National Stock Exchange} or BSE {Bombay Stock Exchange}] and the order stays in the queue of exchange’s other orders and gets executed if the price of that share comes to that value. Once you get the confirmation of this transaction, the shares purchased, will be sent to your demat account. The shares will be stored in demat account in electronic format.
Rolling Settlement Cycle: (RSC)
RSC means when you will get your shares in your demat account. In a rolling settlement, each trading day(T) is considered as a trading period and trades executed during the trading day(T) are settled on a T+2 basis i.e. trading day plus two working days. So the conclusion is on forth working day you will get the shares in your demat account.
What is Demat account and why it is required?
Securities and Exchange Board of India (SEBI) is a board of India appointed by the Government of India in 1992 with its head office at Mumbai.
Its one of the function is helping the business in stock exchanges and in other security markets. In another word it is the regulator for stock exchanges. It monitors and regulates both stock exchanges in India.
Read more in Economics
a) Demat (short form of Dematerialization) is the process by which an investor can get shares (also called as physical certificates) converted into electronic form maintained in an account with the Depository Participant (DP).
b) DP could be organizations involved in the business of providing financial services like banks, brokers, financial institutions etc. DP’s are like agents of Depository.
c) Depository is an organization responsible to maintain investor’s securities (securities can be shares or any other form of investments) in the electronic form. In India there are two such organizations called NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services India Ltd.)
d) Investor’s wishing to open Demat account has to go DP and open the account.
e) Opening the Demat account is as simple as opening the saving bank account with any bank.
As you need bank account to save money, deposit cheques etc, likewise you need to have a demat account to buy and sell stocks in share market and to hold the shares.
f) All shares what you own will show in your demat account, so you don’t have to possess any physical certificates. All your shares are all held electronically in your demat account.
As you buy and sell the shares, accordingly, your shares will get adjusted in your demat account.
When you place the buy order, the message is transferred to the exchange [either NSE {National Stock Exchange} or BSE {Bombay Stock Exchange}] and the order stays in the queue of exchange’s other orders and gets executed if the price of that share comes to that value. Once you get the confirmation of this transaction, the shares purchased, will be sent to your demat account. The shares will be stored in demat account in electronic format.
Rolling Settlement Cycle: (RSC)
RSC means when you will get your shares in your demat account. In a rolling settlement, each trading day(T) is considered as a trading period and trades executed during the trading day(T) are settled on a T+2 basis i.e. trading day plus two working days. So the conclusion is on forth working day you will get the shares in your demat account.
What is Demat account and why it is required?
Securities and Exchange Board of India (SEBI) is a board of India appointed by the Government of India in 1992 with its head office at Mumbai.
Its one of the function is helping the business in stock exchanges and in other security markets. In another word it is the regulator for stock exchanges. It monitors and regulates both stock exchanges in India.
Read more in Economics
a) Demat (short form of Dematerialization) is the process by which an investor can get shares (also called as physical certificates) converted into electronic form maintained in an account with the Depository Participant (DP).
b) DP could be organizations involved in the business of providing financial services like banks, brokers, financial institutions etc. DP’s are like agents of Depository.
c) Depository is an organization responsible to maintain investor’s securities (securities can be shares or any other form of investments) in the electronic form. In India there are two such organizations called NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services India Ltd.)
d) Investor’s wishing to open Demat account has to go DP and open the account.
e) Opening the Demat account is as simple as opening the saving bank account with any bank.
As you need bank account to save money, deposit cheques etc, likewise you need to have a demat account to buy and sell stocks in share market and to hold the shares.
f) All shares what you own will show in your demat account, so you don’t have to possess any physical certificates. All your shares are all held electronically in your demat account.
As you buy and sell the shares, accordingly, your shares will get adjusted in your demat account.
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