Demat account is the doorway to trading in stock market/stock exchanges. Every trader who wants to buy or sell shares in the stock market has to create or open a demat account. Now, here comes the bigger problem at hand – to select the best depository participant. If opening a demat account is one thing, searching for the right depository participant is another thing.
When you start your quest for the best DP to open your new demat account, it’s pivotal to analyze everything related to the DP. Starting from features to a spectacle of services they offer to the bunch of charges they levy on selling shares via your demat account, and many other details – you have to delve into everything concerning the depository participant.
To receive an amazing trading experience, not only do you have to look into all the aforementioned aspects, but also, finding the right depository participant and opening the best demat account is concomitantly necessary. If you feel that it’s easy to find a depository participant that ticks all your checkboxes, then you must have been mistaken. Until and unless you know inside-out about trading and demat account, figuring out the best DP out of the lot wouldn’t be a walk in the park.
There are no limitations and restrictions concerning opening multiple demat accounts as well. Generally, when you connect with a depository participant or a stockbroking firm, they open both trading account and demat account together. So, this shouldn’t be an issue that you must focus on. You can open as many demat accounts as you want, but ensure that you open new accounts with different depository participants. Because there’s a principle or rule that a trader or an investor cannot create multiple demat accounts with the same depository participant.
You must be curiously thinking about what depository participant has anything to do with the demat account, and vice-versa. But there’s so much you should learn and know about the depository participant (DP) and demat account opening with the DP.
Here are the key pointers that’ll help you to choose the best demat account:
Create Your Trading and Demat Account With The Same DP
The easiest enroute to open a demat account is by creating it with the same depository participant where you have opened your trading account. Both the accounts are opened by the DP to simplify the account creation procedure. If you create your demat and trading account with the same DP, it’ll not only help you to trade efficiently but also allow you to monitor the trades on a single screen. In addition to that, it abridges the process by going online. When it comes to offline, the trader has to send a self-attested debit instruction slip (DIS) to make a sale happen. This is not the case with online trading. The DP promptly transfers your shares to your demat account after the sale of your shares in the stock market.
Check The Demat Account Accesibilty Through Your DP
This is another important check that every trader or investor may do. Depository participants or stockbroking firms allow you to have access to both your trading and demat accounts via the same online website. But sometimes, a few depository participants or stockbroking firms don’t have this feature. So, whenever you want to check your demat account, you have to sign in with your login details shared by your service provider. It’s a bit troublesome to do that every time. In the future, if you ever plan to open a new demat account with any DP, do verify this aspect with them.
Check The Service History Of The DP
Another way to know the credibility and popularity of any depository participant is through the online reviews written by multiple users and traders who used or are using this platform. Reading those reviews gives you a gist of what kind of platform that DP is providing, the kinds of features available with them, charges levied by them, pledging of shares, their responsiveness towards online queries, dematerialization, rematerialization, and the way they are running their operations. If you feel any off-vibe about a particular DP, you can simply quit looking further and go for searching a better DP by following the same steps we have shared.
Check and Compare The Charges Levied By The DP With Other Depository Participants
If you are a demat account user, then you must be knowing the list of charges you have to pay upfront to the depository participants. For those who don’t know, here’s a summary of charges you have to splurge from your pockets – brokerage charges, depository participant charges (DP charges), physical and duplicate statement charges, dematerialization and rematerialization charges, annual maintenance charges (AMC), depository membership charges, and other fixed costs. As and when you get a list of these charges, make a note of these and compare the same with other depository participants to get a bigger picture. By doing so, it gives you a basic idea of DP’s point of vantage. However, savings should not be the first priority on your checklist, instead, how the depository participant gives you the services should be.
List Of Other Factors To Consider
So far, you have learned the key pointers that every trader must consider to open the best demat account. Now, there are some other factors that you must make notes of before taking the final call about the opening of the best demat account.
Account Opening Should Be Simple
Frankly, no one likes anything that’s arduous, and that includes opening a new demat account with the depository participant. So, finding the right DP that makes your work easier should be the pick of your lot. SEBI has drafted proper guidelines about demat account opening, where all the depository participants have to abide by. Nowadays, the procedure to open a demat account with the DPs has been simplified with a simple e-KYC. You submit all the necessary documents online, and voila, after the verification and self-identification confirmation, your new demat account gets opened and ready to use.
Inbuilt Software and Smooth Interface
The best way to go with account opening is to take the 2-in-1 account (trading cum demat account) to enjoy uninterrupted services offered by a single depository participant. However, one thing you must check before jumping into account opening is the inbuilt software and user interface. Go to their web-based application as well as their application on your smart device and check how smooth is their interface. Because all the key aspects like placing orders online, buying and selling shares, debits and credits to the demat account, and every other aspect related to your demat account should happen smoothly and seamlessly without a hitch. Finally, ensure that you are able to access the depository participant’s portal from the website and the application easily at your convenience. At the end of the day, you should be able to switch between apps, place orders, and make some quick profits on any regular trading day or intraday.
Trading and Brokerage Charges
Competition in the trading business is literally high, as you find multiple DPs at every nook and corner of the world offering the same type of services. Now, what’s causing the competition here? Well, it’s the brokerage charges. The lower the broker charges, the higher the chances the traders would subscribe to that particular DP. The bargain to curtail the brokerage charges takes place between brokers and traders all the time. In addition to that, every year the trader is charged with an annual maintenance charge for holding your demat account with them. The AMC or annual maintenance charges range between Rs 500 to Rs 1000 annually. Whenever you sell a share in the market, the DP throws DP charges at you. As and when the shares from your demat account get debited, the depository participant is obliged to pay a fee to the regulatory depository (NSDL or CDSL). The same charges are carried forward to your account. Simply put, on the sale of your shares, the DP pays a certain fee as charges to NSDL or CDSL, and later, they’ll recover it from you in the form of DP charges. There are plenty of other costs that add up to your total. So, compare the costs and be aware of them before you make any decisions w.r.t opening the best demat account.
Services Beyond Demat Account Opening
Depository participants not only provide you with the basic demat account services but also provides key analytics of online trading in real-time. This helps traders to make informed decisions with respect to buying and selling shares in the market. The data provided by the DP is associated with multiple factors like political, economic, social, technological, environmental, and legal. These analytics affect the overall performance of the share. Knowing these trends prior helps traders to make better decisions with regard to trading. Other than that, they also provide timely alerts, demat inflows, demat outflows, real-time trading data, industry-related information, etc. Make sure you check with the depository participant whether they offer all the aforementioned services or not. Because they are like value-added services that determine the best demat account.
Summary
There are an array of things that a trader must look into before hopping into opening an online demat account with any depository participant. To identify the best demat account, you need to check out the kinds of services provided by the depository participant. Well, it’s not just basic services, because, at the end of the day, quality wins over quantity. Moreover, traders should check out for the user complaints on depository participants. Fewer the user complaints, the better the depository participant. Tradesmart Online provides an all-in-one account where you can avail all types of premium trading and demat account services at your doorstep. You can enjoy the trading experience in the comfort of your home. So, what are you waiting for? Open the trading and demat account with Tradesmart Online right away, start trading, avail good profits, and increase your bank balance. Now that you are aware of every detail on how to choose the best demat account, it’s just a matter of minutes to kickstart your trading safari.
The TradeSmart advantage
TradeSmart offers an easy to register and use platform for traders, especially if you’re new to trading and want to learn more about it. Here are some of the features it offers
Simple And Minimalistic Interface. Easies for new users/beginners.
Instant Fund Transfer through Netbanking and UPI
Cover, Bracket and After Market hours orders (Advanced order types)
80+ Indicators and Trade From Charts
Day And Night Themes
Easy IPO registration
Easy and Simple to place and monitor orders, holdings, positions, etc.
Single Sign In (No separate login to Back office and access to profile details)
Biometric login process for more safe and secure trading
Of course, a stockbroker cum depository participant aids you in opening or creating your new trading and demat account. They not only offer or provide the basic trading and demat account services but also help you with data submission, setting up your trading and demat account online, and providing you key information like data analytics and industry reports that adds weight and value to your futuristic trading decisions.
Yes, a trader can open a demat account online with the depository participant by submitting the necessary and mandatory self-attested documents, followed by self-identification verification to finish the whole process.
Yes, opening a demat account requires a set of key documents like an Aadhar card, PAN card, proof of your income details, proof of your bank account, and at least 1-3 passport size photos of yours.
No, generally, depository participants won’t charge anything for opening a demat account. It’s free of cost. However, after opening the account, you have to pay certain costs to the depository participant like brokerage fees, DP charges, annual maintenance charges, and many other costs.
Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.
Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.
Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.