Month: February 2022

A demat account shares a lot of similarities with a bank account. For one, both of them are electronic accounts. And secondly, they’re used to safely and securely store assets electronically – money in the case of a bank account and securities, like shares and bonds, in the case of a demat account.

Considering the fact that you use your demat account to store your investments, the concept of assigning a nominee to your account also applies here, just like how you would do to a bank account.

But how do you assign a nominee to your demat account and why should you do it? The answers to these questions are outlined in the sections that follow. Continue reading to find out all about assigning a nominee to your demat account. But before we get to the answers, let’s first discuss the fundamental concept of what the term ‘nominee’ means.

What is a nominee?

In simple terms, a nominee is an individual who is assigned by the owner of an account. This assigned individual will receive any and all benefits arising from the account, including any balances remaining with the account, in the event of the demise of the account owner.

Since all of the benefits and balances of an account would go to the nominee upon the account owner’s demise, individuals generally choose to assign their own family members such as spouse, children, or parents as a nominee to their account.

Why should you add a nominee to your demat account?

Assigning a nominee is one of the most important tasks that you should do as a demat account holder. One of the main reasons for this has to do with the fact that having a nominee makes it extremely easy for the demat account holder’s family and beneficiaries to withdraw the shares held in the account.

Without a nominee assigned to a demat account, the bereaved family will be forced to meet several cumbersome legal requirements like obtaining a succession certificate. Only then can they actually go ahead and claim ownership of the securities in the account. This can unnecessarily cause delays and hassles to the family, since the process of obtaining a succession certificate can be both expensive and time-consuming.

However, with a nominee assigned to a demat account, all of these hassles can be eliminated. And to claim ownership of the securities in the deceased individual’s demat account, the nominee only has to submit a transmission form that has been duly filled, along with a certified copy of the demat account holder’s death certificate. The entire process of transferring the assets can then be completed within just a few days instead of taking several months.

When can you add a nominee to your demat account?

Now that you know how important it is to add a nominee to your demat account, let’s take a look at when you can add one.

• At the time of opening the account
  

  The best time to add a nominee to your demat account is at the time of opening of the said account. This will eliminate the chances of you forgetting to add a nominee later on, and it will also ensure that your account and the assets therein are adequately protected.When you are filling up your demat account opening form, whether offline or online, all that you have to do is ensure that you fill in the details of the individual or individuals whom you would like to assign as nominees to your account. Also, you might have to submit certified copies of their KYC documents like their identity proof and address proof along with the account opening form.

• Anytime after opening your account
  

  However, if you have forgotten to assign a nominee at the time of opening of your account, you don’t need to worry. One of the advantages of a demat account is that you can add a nominee at any point in time. You have to simply get in touch with the concerned authorities and submit the necessary documents such as the filled nomination form, along with the KYC documents of the nominee. And your nominee will be assigned as per your instructions.

How can you add a nominee to your demat account?

Adding a nominee to your demat account is an extremely easy and hassle-free process. Here’s a quick look at the two different ways through which you can add a nominee.

• Through your stock broker
  

  Now, in most cases, your stock broker is also your Depository Participant. This is especially true when you open both a demat and trading account from a single stock broker. TradeSmart, for instance, is a DP and a stock broker with whom you can open a demat and trading account.So, if your stock broker also fulfills both these roles, all that you have to do to add a nominee is download the nomination form from your stock broker’s website, fill it up with the nominee’s details, get their signature, affix your own signature, and submit the form along with the necessary documents to your stock broker.

• Through your Depository Participant
  

  Alternatively, if your stock broker and your Depository Participant are two different entities, then you would have to submit the duly filled nomination form and the necessary documents directly to your Depository Participant.Some stock brokers also allow you to assign a nominee online as well. So, it might be a good idea to first check if your stock broker permits you to do it online, before going ahead with the offline method described above.

Things to note when adding a nominee to your demat account

Now, there are quite a few things that you should consider when adding a nominee to your demat account. Let’s take a quick look at a few of these important considerations.

• The nominee has to be an individual and not a non-individual entity like HUF, body corporate, partnership firm, trust, or society.
• Non-individual entities holding a demat account cannot assign a nominee. Only individual demat account holders can.
• You can assign a minor as a nominee. However, you would have to give details of the minor’s guardian as well.
• If your demat account is held jointly, the nomination form that you submit must be signed by all of the account holders.
• You can assign more than one nominee. In fact, you can assign up to three nominees. Also, you can specify the percentage of shares or securities that you wish to be transferred to each of the nominees upon the account holder’s demise.
• Just like how nominees can be added at any point in time, they can also be modified and removed whenever you wish by submitting a duly filled form to your stock broker or Depository Participant.

Conclusion

As you can see, assigning a nominee is extremely important since it can drastically reduce the complications in the transmission of shares and securities in the event of the demat account holder’s demise. If you already have a demat account and haven’t assigned a nominee yet, it is advisable to initiate the process forthwith without any further delay.

On the other hand, if you don’t already have a demat and trading account, all that you would need to do is visit TradeSmart Online. You can open demat account in an easy and paperless process within just a few minutes.

All of the shares and other securities that you purchase are held in an electronic form in an account known as the demat account. And without this demat account, you cannot buy or sell shares in the stock exchanges.

Since this is an electronic account, all of the transactions that you make – both debits and credits – are recorded in your demat account holding statement. That’s not all. All of your holdings, which are basically the investments that you’ve made and possess in your account currently, are also recorded in the said statement.

At any point in time, you can view this information and download a copy of the details for your personal purposes. Wondering how to do that? Here’s some in-depth information on what the demat account holding statement is and how you can download the same easily to view the details related to your account.

What is the demat account holding statement?

As you’ve already been introduced to before, the demat account holding statement is a detailed record of all of the securities that you currently possess in your account. This statement includes information such as the number of shares or units of securities that you possess, the current market value per share or per unit, the total value of the investments in your account, and the NAV of mutual fund units, among other things.

What information does the demat account holding statement contain?

The demat account holding statement, when downloaded in the form of a Consolidated Account Statement (CAS), contains a host of information. In addition to the information mentioned in the previous section, the CAS consists of the below mentioned information as well.

• Statement of Accounts
  

  This section of the Consolidated Account Statement consists of all the shares and other securities that you’ve bought and sold during the period of time to which the statement pertains. All of the purchases appear in the statement as credits, whereas all of the shares and other securities that you’ve sold would appear in the statement as debits.

  The statement also consists of information like the number of shares or units purchased, the date and time of purchase, and the price per unit at which they were purchased, among other details.

• Statement of Holdings
  

  The statement of holdings section of the Consolidated Account Statement consists of all of the details of the shares and other securities that are currently present in your demat account. This statement is further subdivided into multiple categories of information. Here’s a quick look at these categories.

• Current Balance
  

  This denotes the total balance of shares and other securities that your demat account currently has. It includes free balance, locked-in balance, and pledge balance. Not sure what these terms mean? We’ve explained them below.

• Free Balance
  

  This denotes the balance of shares and other securities that are freely available for trading. Any sale of securities that you make will be debited from the free balance.

• Locked-in Balance
  

  As the name itself signifies, the locked-in balance signifies the balance of shares and other securities that are currently locked from trading. Until the lock on these securities is removed, you cannot sell any of them on the stock exchanges.

• Pledge Balance
  

  This denotes the balance of shares and other securities that are currently pledged with the stock broker. Until the pledge is removed by way of repaying the loan or margin that you may have from the stock broker, the pledge balance will not be made available for trading.

How to download the demat account holding statement?

Now that you know what a demat account holding statement is, let’s take a look at the different ways through which you can view and download it.

• Through your trading account
  

  One of the easiest ways through which you can view and download your demat account holding statement is via your trading account. When you open a demat account with a stock broker, it is almost always automatically linked to a trading account. And as such, you can view a whole host of demat account related information directly on your trading account itself.

  To do this, all that you have to do is log into your trading account via the user credentials given to you. Once you’re logged in, search for and navigate to your demat account section or your holdings section, depending on your stock broker’s platform. Here, you can view and download your demat account holding statement for any period that you wish.

• By logging into your demat account
  

  Another quick and easy way to download your demat account holding statement is by logging into your demat account. A major advantage that you get to enjoy by choosing this method has to do with the fact that you can gain access to the Consolidated Account Statement (CAS). The CAS consists of information from all of the demat accounts you possess with a depository, making your job a whole lot easier.

  The process that you would have to follow to log into your demat account varies according to the depository with whom you have your account. So, here’s the step-by-step process that you would have to follow for CDSL and NSDL accounts.

• Central Depository Services Limited
  

  Here’s what you would have to do to view the Consolidated Account Statement on CDSL.

1. The first step is to register yourself on CDSL’s Easi platform, if you haven’t already.
2. Then, log in using your user credentials. To complete the log in, the CDSL platform might ask you to verify your identity further by specifying your PAN, your date of birth, and Beneficiary Owner ID, among others.
3. Once you’ve entered all of the above details, a One-Time Password (OTP) will be sent to the mobile number registered with your account.
4. Enter the OTP in the field.
5. After logging in, you will then be able to view your demat account balance and download the Consolidated Account Statement.

• National Securities Depository Limited
  

  If your demat account is with NSDL, the process that you would have to follow to download the demat account holding statement is as follows –

1. Firstly, you would have to register yourself on NSDL’s IDeaS platform.
2. Once you’re done with that, you would have to then log in using your user credentials.
3. At this stage, a One-Time Password (OTP) would be generated and sent to your mobile number.
4. Enter the OTP in the relevant field and continue.
5. Once you’re logged in, the Consolidated Account Statement can be downloaded by you for any time period you desire.

Conclusion

Once you’ve managed to download the demat account holding statement, ensure that you read through it thoroughly. While you’re at it, remember to check whether your personal details, folio number, dividend payouts, investments, and transactional information are in order. If anything seems out of the ordinary or if you witness any discrepancies or mistakes, make sure to bring it to the notice of the concerned authorities right away.

Your demat account is very similar to your bank account. It allows you to store securities such as shares, bonds, mutual fund units, and more in an electronic format. And considering the fact that your demat account holds all of your investments, it is crucial to keep a close track of the account and the balance contained therein.

This is especially true if you’re an individual who regularly buys and sells shares on the stock market. But then, how do you go about checking your demat account balance? This article can help you out with that. Continue reading to find out what your demat account balance is and how you can check it periodically.

What is the demat account balance?

Your demat account balance is basically an overview of the number and the value of shares and other securities that your account currently contains. And as you buy and sell securities on the stock market, your demat account balance either goes up or goes down.

As you’ve already seen above, a demat account is the stock market equivalent of a bank account. Just like how you safely and securely store your money in a bank account, you do the same with stocks and other securities in a demat account.

And similar to how you check your bank account balance by taking a look at your bank’s passbook or by logging into your netbanking account, you can do the same with your demat account as well.

Why should you check your demat account balance?

Continuing on from the previous point, your demat account balance fluctuates constantly depending on the number of securities that you buy and sell. And so, it is extremely important for you to keep a track of your demat account balance to ensure that the account is debited and credited accordingly with each transaction, and with the right amount each time. This is especially true in the case of purchase of shares since they only get credited to your demat account within T+2 days.

Another major reason why you should check your demat account balance periodically is to ensure that there are no discrepancies, mistakes, or unauthorised transfers to or from your account. Typically, when you open a trading and demat account through a stock broker, you sign an agreement known as the Power of Attorney (POA). This agreement gives power to your stock broker to access your demat account and initiate transfers on your behalf as needed. In some very rare cases, stock brokers can end up misusing the POA that you sign to effect unauthorised share transfers without your knowledge.

But you need not worry about this, because the Securities and Exchange Board of India (SEBI) keeps a close eye on the industry and its participants. And by keeping track of your demat account balance, you too can swiftly identify discrepancies or unauthorised transfers, if any. This way, you would be in a much better position to bring this to the notice of the concerned authorities and have it rectified immediately.

How to check your demat account balance?

Now that you’re aware of the importance of checking your demat account balance periodically, here’s how you can actually do it. Fortunately, there isn’t just one way to do this. You can make use of three different ways to check your demat account balance. The sections below elaborate these methods.

• Through your demat account statement

  The depository with whom you have your demat account will send you regular statements via a physical letter, email, or both. This statement is what’s known as the demat account statement, and it consists of a host of important information regarding your demat account, including the current balance in your account. One look at this statement is all it takes for you to find out just what your demat account balance is.

• Through your trading account
  

  While the first method is by far one of the easiest, it may not always give you the latest picture regarding your account balance consistently. This is because the depository only sends out demat account statements to you on a monthly or quarterly basis. So, if you wish to check your demat account balance at a point that’s between the issue dates of two subsequent statements, the first method may not be the way to go.

  Instead, you can get all the information related to your demat account balance by simply logging into your trading account. Since your demat account is almost always linked with a trading account, you can simply log into your trading account using your user credentials to view what your current demat account balance is.

• By logging into your demat account
  

  Alternatively, if you possess multiple demat accounts, the second option may not be very practical since you would have to log into each one of the linked trading accounts to get to know your balance. In that case, the above method may not be ideal.

  What you can do instead is log directly into your demat account to check the balance. This is the best way to gain access to the Consolidated Account Statement (CAS). The CAS is essentially a single statement that contains key information related to all of the demat accounts that you hold with a depository. It not only helps you save time, but also gives you a much clearer picture of your demat account balances.

How to download your Consolidated Account Statement?

Here’s a quick look at the step-by-step processes that you would have to follow to check your demat account balance on both the depositories in India – the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL).

Central Depository Services Limited (CDSL)

If your demat account is with CDSL, the process that you would have to follow is as elaborated below.

1. Firstly, register yourself on CDSL’s Easi platform.
2. Once you’re registered, log in using your user credentials. You might be asked to verify your identity by entering your PAN, your date of birth, and Beneficiary Owner ID.
3. Once you’ve logged in, a One-Time Password (OTP) may be sent to the mobile number registered with your account for further verification.
4. Enter the OTP on the relevant field and proceed to log in.
5. Upon successfully logging in, you can view your demat account balance and download the Consolidated Account Statement.

National Securities Depository Limited (NSDL)

On the other hand, if your demat account is with NSDL, here’s what you would have to do to download your Consolidated Account Statement.

1. Firstly, register yourself on NSDL’s IDeaS platform.
2. Once you’re registered, log in using your user credentials. You might be asked to verify your identity through a One-Time Password (OTP).
3. Enter the OTP that you receive on your mobile number in the relevant field and proceed to log in.
4. After logging in, you can easily download the Consolidated Account Statement to view your demat account balance.

Conclusion

As you can clearly see, checking your demat account balance is extremely easy and the process takes only a few minutes to complete. Doing this simple exercise without fail on a periodic basis is extremely essential, because it can help you find discrepancies and mistakes on time, thereby putting you in a better position to have them rectified swiftly.

And if you don’t have a demat and trading account yet, you can simply visit TradeSmart Online to get started right away. The entire process is paperless and can be completed online within a few minutes. Click here to get started.

As you may know already, a demat account is a mandatory prerequisite for trading in the Indian stock markets. It allows you to store securities like shares, mutual fund units, bonds, and Exchange Traded Funds (ETFs) in an electronic form instead of the more traditional paper form. The demat account is more akin to a bank account.

Both of them are electronic accounts, they’re used to safely and securely store assets, and the assets can be transferred into and out of the account at will. And just like with bank accounts, you can also have multiple demat accounts in your name. Additionally, you can even transfer shares from one demat account to another.

Want to know more about how you can transfer shares and securities from one demat account to another? Continue reading to find out how you can go about doing it.

Can you transfer shares from one demat account to another?

The stock market is a heavily regulated and automated environment. And since most of the actions are automated, they are executed with little to no intervention from the trader or any other individual, or from any regulating body.

For instance, when you purchase shares in the stock market, the shares that you purchased will be transferred out of the seller’s demat account and automatically transferred into yours within T+2 days. And similarly, when you sell shares in the stock market, the shares that you sold will again be automatically transferred out of your demat account and into the buyer’s demat account as per schedule.

In both cases, the transfer of shares happens without the need for your intervention. That said, did you know that you can initiate this transfer of shares manually from your end?

Yes, that’s right. Just like how you would transfer money from one bank account to another via the internet banking facility, you can transfer shares from one demat account to another. However, since this would be a manual transfer, it would be an off-market transaction.

Why would you need to transfer shares from one demat account to another?

Considering the fact that the transfer of shares into and out of your demat account occurs automatically when you purchase or sell your shares in the stock market, why would anyone need to transfer them manually? Surprisingly, there can be multiple different reasons behind this. Here’s a quick look at a few of the reasons why you would want to transfer shares from one demat account to another.

• To consolidate the assets spread out across multiple demat accounts

As mentioned above, you can have several demat accounts in your name. While possessing more than one demat account can have its own advantages, at some point, you might want to consolidate all of your investments into a single account and close the rest. In such a case, you would have to transfer the securities manually from each one of your demat accounts to the final target demat account.

• To change the Depository Participant or stock broker

Not all Depository Participants or stock brokers provide the same range of services. And nor do they levy service charges on the same level. So, if you feel that the services offered by your Depository Participant or stock broker are not up to the mark, or if the charges levied by them seem to be a little on the higher side for your budget, you may choose to change your DP or stock broker. And this would require you to manually initiate the transfer of shares and other securities contained in the old demat account to the new one.

If high brokerage charges have you worried, you can put those concerns to rest by opening a demat account with Tradesmart Online. The brokerage charges are just 0.007% of the trade under the Value Plan, and only Rs. 15 per trade under the Power Plan.

• As a gift to a family member or an individual

Some individuals might want to transfer a portion of their investments as a gift to a family member or to another individual. If you want to do this, keep in mind that it would be an off-market transaction. So, you would have to manually transfer the assets from your demat account to the demat account of the recipient individual.

How to transfer shares from one demat account to another?

Now, there are two different ways, offline and online, to effect a manual transfer of shares from one demat account to another. Here’s a brief overview of both of these ways.

1. Offline Method

   When you open a demat account with a Depository Participant, you will be given a booklet with a set of leaves known as Delivery Instruction Slips (DIS). These slips can be used to transfer shares from one demat account to another.

   All that you would have to do is fill out a DIS, where you will be asked to enter details such as the Beneficiary Owner ID of your account and the target account, the International Securities Identification Number (ISIN) of the shares being transferred, and the mode of transfer.

   Once you’ve filled the DIS, the next step is to sign it and submit it to your stock broker, who transfers the same to the Depository Participant. The Depository Participant will verify the DIS and process the transfer from your demat account to the target demat account.

2. Online Method

   Alternatively, if you prefer to transfer the shares through the online method, here’s what you would have to do.

   1. Firstly, you would have to register yourself on CDSL’s Easiest platform.
   2. Once you’re registered, the next step is to log into your account using your user credentials.
   3. Upon logging in, navigate to the ‘Transaction’ tab and click on the setup option.
   4. Click on the ‘Bulk Setup’ option and click on the ‘Transaction’ tab.
   5. Here, enter all the details asked under this tab such as the execution date, Beneficiary Owner ID, the ISIN that you wish to transfer, the quantity of transfer, and the reason for the transfer.
   6. Once you’re done with all that, click on the ‘Submit’ button below.
   7. You will then be asked to verify the transfer request. Click on the ‘Verify’ button below and then on the ‘Commit’ button.
   8. The next step is to enter your CDSL easiest PIN, which is an 8-digit alphanumeric PIN that you would have set up at the time of registration.
   9. Once you enter the PIN, the request will be submitted and upon verification of the same by the DP, the transfer will be effected.

Things that you should know when transferring shares

Now that you know how to transfer shares from one demat account to another, let’s take a look at a couple of things that you should keep in mind before you effect such a transfer.

• It may take a bit of time
  

  The transfer of securities from one demat account to another is not instantaneous. It may take anywhere from around 2 business days to up to 5 business days to be completed. So, this is something that you should account for.

• You may be charged for the transfer
  

  Some stock brokers and Depository Participants may charge you a nominal fee for the transfer of shares and other securities from one demat account to another. Therefore, it is a good idea to find out what the charges levied by your DP or broker are, if any, for transferring shares beforehand.

Conclusion

Another major factor that you should keep in mind while transferring shares is that if you plan to close the demat account after the transfer, the entire process can be done for free without any charges whatsoever. If you don’t plan to close your demat account after the transfer, then you’re likely to be levied a nominal transfer fee.

Looking to start trading in stocks? Open a demat and trading account with TradeSmart Online right now. The account opening process is very simple and takes only a few minutes to complete. Also, it is completely paperless too.

Many individuals, especially novice traders, tend to confuse both demat accounts and trading accounts. However, the fact of the matter is that a demat account and a trading account are two completely different accounts that each have their own functions. This leads them to think that to gain access to the funds that you receive from a sale, you would have to transfer it from the demat account to the bank account.

However, contrary to popular opinion, this is not true. Want to know more information on how to transfer money to your bank account? Continue reading to find out. But before that, let’s quickly go through what a demat account is, its function, and whether you can transfer money from a demat account to a bank account.

What is a demat account?

A demat account is essentially an electronic account that allows you to store securities such as shares, mutual fund units, bonds, debentures, and Exchange Traded Funds (ETFs) in a digital form. Apart from the function of being used to store such securities safely and securely in an electronic form, the demat account has very little use apart from it.

Can you transfer money from your demat account to your bank account?

The short answer is no. As you’ve already seen above, a demat account’s function is only to store shares and other securities that you’ve bought through the stock exchanges. But what do you do if you want to trade your shares? That’s where the trading account comes into the play.

A trading account is an electronic account that allows you to purchase and sell securities on the stock exchanges. And since this is the primary function of the account, the funds that you wish to use to buy or sell shares from the stock exchanges have to be transferred to the trading account.

So, when you buy shares from your trading account, you use the money that you transfer to it from your bank account. Similarly, when you sell shares, the return that you make on the trade is credited again to the trading account.

Now, to make use of this amount that you generate through a sale, you would have to transfer it (by initiating a pay out) from your trading account to your bank account. Without making this transfer, the money would continue to stay in the trading account and wouldn’t be available for any other use apart from buying shares once again.

So, it is your trading account from where you would have to transfer funds to your bank account for your use. Therefore, it is extremely crucial for you to know just how to initiate a payout transfer from your trading account to your bank account.

How to transfer money from your trading account to your bank account?

Transferring funds from your trading account to your demat account is extremely easy and takes only a few minutes to complete. This is especially true in the case of TradeSmart trading accounts. In fact, with TradeSmart, there are as many as 3 major ways through which you can initiate the payout transfer to your bank account.

1. From the Back Office – BOX

   Your back office platform – BOX is a powerful tool that not only provides you with a wealth of information, but can also be used to transfer money from your trading account to your bank account. Here’s what you would have to do.

   1. Use your TradeSmart Online user credentials to log into the BOX backoffice platform.
   2. Click the menu list and look for the Fund Transfer option.
   3. Select the option and click on ‘Pay Out’.
   4. Then, enter the amount that you wish to transfer to your bank account.
   5. Once you’ve entered the amoun, click on the ‘Pay Out’ button.
   6. Your Pay Out transfer request will be registered and the amount be automatically credited to your bank account.

2. Through the Sine Mobile Application

   If you’re a TradeSmart Mobile application user, follow the below mentioned steps to initiate a pay out transfer from your trading account to your bank account.

   1. Using your user credentials, log into the TradeSmart Mobile application.
   2. Select the ‘Fund Transfer’ option, which you can find under the 3-line menu of the app.
   3. Choose the ‘Pay Out’ option.
   4. Enter the amount that you wish to transfer out of your trading account and to your bank account and then proceed.
   5. Your fund transfer request will be accepted successfully and the funds will be transferred to your bank account within the stipulated timings.

3. Through the NEST Trader Application

   On the other hand, if you’re an experienced trader using the NEST Trader desktop application to conduct stock trading, the process that you will have to follow is –

   1. Open the NEST Trader application on your desktop computer and use your user credentials to log into the application.
   2. Search for and click on the ‘Secure URLs’ option of the app and choose the ‘Pay Out’ option.
   3. Here, you’ll be asked to enter the amount of funds that you wish to transfer from your trading account.
   4. Enter it and click on submit.
   5. Your Pay Out request will be registered and the funds will be automatically transferred to your bank account within the timings stipulated by TradeSmart.

Things you should know about transferring money from your trading account to your bank account

Now that you’re aware of how you can transfer funds from your trading account to your bank account, here are a few things that you should know and account for.

1. At TradeSmart, there are cut-off timings beyond which your payout request will not be processed on the same day. Instead, it will be processed only on the next business day.
   • If you’re placing a payout request from BOX, the cut-off timing is 7.00 AM.
   • On the other hand, if you’re placing a payout request from any other application, then the cut-off timing for the same would be 11.59 PM.
2. Also, you can place payout requests only from Monday to Saturday of each week, with the exception of 2nd and 4th Saturdays of a month.
3. If your payout requests from equity and commodity segments are to an ICICI bank account, the funds shall be credited to your bank account within a period of 3-4 hours from the processing time.
4. And if your payout requests are to a bank account other than an ICICI bank account, the funds shall be credited to your account according to RBI’s NEFT settlement timings.

Conclusion

Before you go ahead and place a payout fund transfer request from your trading account to your bank account, it is advisable to first take a good look at the balance that’s free for transfers.

Sometimes, if you have any pending or open stock market positions, your trading account may show a balance, but it may not allow you to transfer the funds out of the account. In such cases, you will have to close all your positions first to release the funds before placing a fund transfer request.

One of the mandatory prerequisites for buying and selling shares through the stock market in India is a demat account. Without this account, it is currently not possible to engage in any form of stock or security trading. In fact, the Securities and Exchange Board of India (SEBI) has enforced the same as well via a notification.

So, if you wish to become a stock trader who actively participates in the stock market, then opening a demat account in your name should be your first priority. Once you’ve opened a demat account, you will be allotted a demat account number, which you need to safely store away for any future references.

If you’re just getting started with trading or investing in the markets, chances are that you may not be aware of your demat account number despite actively trading in the financial market. If that’s the case, then it is a good idea to first find out what your demat account number is, since this bit of information can be very useful. Wondering what the demat account number is, why it is significant, and how you can get to know what yours is? Read on to find out all these details.

What is a demat account?

To go ahead and better understand how you can get to know your demat account number, let’s first quickly run through the concept of a demat account.

A demat account is nothing but an electronic account that you can use to store all your securities such as shares, bonds, ETFs, and mutual fund units in the dematerialised form. Earlier, before the dematerialization of securities occurred, traders and investors used to store all of the securities mentioned above in the physical form, via paper certificates. As you can imagine, this was not only cumbersome, but was also prone to plenty of risks such as theft, mutilation, damage, and loss.

A demat account, however, eliminates all of the above risks and allows you to store all your securities in one place in a safe and secure manner. Since it is a fully digital account, it is protected via a combination of a user ID and a password, with the credentials known only to the owner of the account.

So, what is a demat account number?

Imagine a bank account. When you open an account with a bank, you’re given a unique number known as a bank account number, is it not? And this number basically acts as the primary identifier for your account.

On a similar vein, a demat account number is also a unique number that’s given to you when you open your account. And it acts as an identifier for your demat account. So basically, the demat account number is the stock market equivalent of a bank account number.

The demat account number consists of 16 digits, with the first 8 digits being the identification number of the Depository Participant (DP ID) with whom you’ve opened your account. The remaining 8 digits make up the customer ID that is assigned to you by the Depository Participant. Put these together, and you have your demat account number!

What is the significance of the demat account number?

The demat account number is by far the most important number that you should be aware of when you start trading in the markets. Since it acts as a unique identifier for your account, it is extremely crucial that you know what this number is.

Without your demat account number, you won’t be able to notify the concerned entities regarding any discrepancies or other mistakes that you notice in your account. Also, you would need to know what your demat account number is, in order to receive and transfer shares to and from your account when you trade in the markets. This is especially true in cases where you effect these transfers manually, outside the purview of the stock exchanges.

Deconstructing the different formats of demat account numbers

In India, there are two depositories that are currently operational, namely the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL).

Depending on the stock broker through whom you have opened your demat account, you can either have it under the NDSL or the CDSL. And why does the depository matter? Well, that is because the format of your demat account number differs depending on the depository with whom you have your demat account.

With NSDL, the demat account number format starts with a prefix – ‘IN.’ This is followed by a 14-digit numeric character, making up 16-digits in total. For instance, this is how the demat account number of an account with NSDL may look like –  IN11223344556677.

With CDSL, the demat account number format is a full string of 16 numeral characters, with no alphabet prefixes or suffixes. So, here’s how a demat account number of an account with CDSL may look like – 1122334455667788.

How to get to know your demat account number?

Now that you’re aware of what a demat account number is and the different formats that it can exist in, let’s take a look at how you can find out your unique account number. There are many ways in which this can be done. Here are all the details.

• By checking your welcome letter
  

  This is by far the easiest way through which you can find out your demat account number. When you open a demat account, you will receive a welcome letter from the depository at the address specified by you. This letter will contain all the details of your demat account, including your demat account number.

  In some cases, you may not receive a physical welcome letter. Instead, you might receive one as an email. So, make sure to check the email address provided by you at the time of account creation for the welcome letter.

• By checking your demat account statement
  

  Your depository will periodically send demat account statements via email or through physical letters. These statements will contain all of the credit and debit transactions that you may have carried out during the specified period of time. In addition to the transactional information, the statement will also carry your demat account number, usually at the top of the page.

• By logging into your demat account
  

  Alternatively, you can also view your demat account number by logging into your account using the user credentials given to you. In addition to the demat account number, you can gain access to a whole lot of other information as well through this method, such as the number and value of the assets in your account, the date of the transactions and the current market value of your securities.

• By logging into your trading account
  

  At the time of opening a demat account, chances are that you’ve linked it with a trading account to facilitate easy and hassle-free stock trading. If that’s the case, then you can simply log into your trading account to view your demat account number. Since the trading account UI tends to be different from one stock broker to another, make sure to check thoroughly to spot your demat account number.

• By getting in touch with your stock broker or Depository Participant
  

  If all else fails, you can also try getting in touch with your stock broker or Depository Participant via email or through their customer support helpline to find out your demat account number. For instance, if you have opened a demat account with Tradesmart Online, you can contact our support team via a phone call or by writing an email to them. However, keep in mind that you may be asked to verify your identity by providing a few details to the customer support.

Conclusion

As you can see, your demat account number is one of the most important pieces of information that you should always be aware of. If you’re not aware of your demat account number already, you can always use any one of the above methods to quickly identify it.

If you don’t already have a demat account, you can quickly get one opened through Tradesmart Online along with a trading account. The account opening process is quick and hassle-free. Follow this link to get started.

Currently, a demat account is a mandatory requirement for buying and selling stocks in the Indian share market. This regulation was introduced by the Securities and Exchange Board of India (SEBI) to make stock trading easier and more hassle-free.

Before this mandatory regulation was introduced, traders and investors used to buy and sell physical shares in the stock exchange through the open outcry system. This required individuals to personally visit the stock exchange’s premises to carry out a purchase or sale transaction with other interested parties. However, this system was plagued with several issues like forging of physical share certificates, non adherence to contractual obligations, and more.

In a bid to eliminate all of these issues and disadvantages, SEBI introduced the concept of demat accounts in the late 1990s. And since then, the Indian stock market has radically changed for the better. Interested to know how a demat account works? Continue reading to find out all about this. And to make the concept easier to understand, let’s first take a look at what a demat account is.

What is a demat account?

A demat account is basically an electronic account that allows you to safely and securely store a wide range of securities in the digital form. With a demat account in your name, you can store securities like shares, bonds, mutual fund units, Exchange Traded Funds (ETFs), and more.

The account is protected using a user ID and password. This effectively prevents individuals other than the intended owner from gaining unauthorised access to the contents of the demat account.

So, to put it in simpler terms, the demat account is the stock market equivalent of a bank account. Just like how a bank account stores all of your money electronically, a demat account stores securities like stocks and bonds. And just like a bank account, you can also transfer the securities in one demat account to another account electronically.

How does a demat account work?

Okay, so now that you’re aware of what a demat account is, let’s take a closer look at how it works. A demat account holds the dematerialized version of your securities. And to ensure that the demat account works in a hassle-free manner and to facilitate the purchase and sale of securities seamlessly, it is usually linked with a trading account. A trading account allows you to buy and sell securities via an exchange. The securities that you buy through a trading account are then stored in the demat account.

That said, the linking of these two accounts is not mandatory. You can choose to hold a demat account separately without linking it to a trading account. However, buying and selling securities in the stock exchanges wouldn’t be possible. You can only hold your securities in a demat form, without the freedom to trade them. This is why it is essential to link your demat account with a trading account. 

What happens in your demat account during the purchase and the sale of securities?

Let’s say that you’ve linked your demat account with your trading account. Now, when you purchase shares in the stock market through your trading account, these shares that you’ve bought are credited directly to your demat account, where they are stored safely.

Similarly, when you sell the shares that you hold in your demat account through your trading account, the requisite number of shares that you sell will be debited from your demat account automatically.

This is precisely why many stock brokers choose to link both trading accounts and demat accounts together. As you can see from the above explanation, linking both of them together makes the entire process of stock trading seamless and hassle-free.

Working of a demat account: An example

Let’s now take up a couple of examples to better understand just how a demat account works. We’ll take up two scenarios – a purchase transaction and a sale transaction – to see what happens in the demat account in both scenarios.

What happens in your demat account when you purchase shares?

Say you’ve recently opened a demat account and linked it with a trading account. You wish to purchase 100 shares of Infosys Limited. And say the shares are currently trading at Rs. 1,900 per share.

After ensuring that the requisite amount to purchase these 100 shares is present in your trading account, you go ahead and place a buy order for 100 shares of Infosys Limited.

Once the buy order gets executed, the 100 shares that you bought will get automatically credited to your demat account within 2 days from the date of trade (T+2 days).

What happens in your demat account when you sell shares?

Continuing on from the example that we saw above, say the shares of Infosys Limited have now risen up to Rs. 2,000 per share. Therefore, you wish to sell the shares that are in your demat account for a profit.

And so, you place a sell order for 100 shares of Infosys Limited. Once the sell order gets executed, the 100 shares of Infosys Limited that you have in your demat account will be debited automatically at the end of the trading day. These shares will then be automatically credited to the demat account of the buyer within T+2 days.                 

What are the advantages of a demat account?

So, you now know how a demat account works. But dematerialization is not the only advantage that it offers. In fact, a demat account offers plenty of other benefits over physical share certificates. Here’s a closer look at these advantages.

1. Enhanced safety and security
   

   This is one of the most important advantages that a demat account offers. Since all of the securities that you hold are protected by a user ID and password, obtaining access to the contents of your demat account is virtually impossible. That’s not all. Since you hold and transfer the securities in a completely electronic format, there’s absolutely no scope for forging or faking the share certificates.
   

2. Enhanced convenience
   

   Before the demat account was introduced, individuals used to carry their share certificates personally to the stock exchange to sell them. This took up a lot of time and energy. However, all of that has now been eliminated with the introduction of the demat account. You can buy and sell shares over the internet from the comfort of your own home.
   

3. Speeds up the stock trading process
   

   Thanks to the demat account, a stock trade now takes less than a minute, which was not the case when physical share certificates were still in use. Back then, it used to take up to a week or more for a trade to be executed completely. But now, it takes only a couple of clicks and a few seconds for a trade to get executed.
   

4. Eliminates risks associated with physical share certificates
   

   With physical share certificates, there were plenty of risks that you had to account for. Loss, theft, and damage being a few of them. However, with a demat account, all of those risks are eliminated since you store your securities in the electronic format.
   

5. Lowers costs
   

   One of the major costs that traders and investors had to account for with physical share certificates was the stamp duty. It was so significant that it used to increase the cost of ownership. With a demat account, the stamp duty rate is now very affordable, leading to lower costs.
   

6. Easy to keep track
   

   All that you would need to do to keep track of your securities is log into your demat account using the user ID and password given to you. You can get a complete overview of your investments from almost anywhere in the world at any time.
   

Conclusion

With this, we hope you’ve now gotten a good understanding of how the demat account actually works. The demat account, with all of its advantages, has completely revolutionised the way stocks and other securities are traded in India. It has not only eliminated any barriers to entry, but has also increased the participation of individuals in stock trading.

If you are planning on investing in the stock markets or trading in any securities, you can get started by opening a demat and trading account on TradeSmart Online. The demat account opening process is easy and paperless.