The world of financial transactions is based on certain regulations which define the way exchanges for gainful purposes are carried out. This is where the regulations governing the trade businesses, holdings, fund deposits and inter-domain movement of monetary resources stem from.
Similarly, holding of securities which can be traded as and when required, is based on a certain set of procedures. The basic requirement that enables a person to trade in securities is a dematerialized account or in short, a demat account.
Ever since the trading procedures became electronic in form, holding of a demat account for equity or debt-based securities became mandatory. A demat account is a depository channel for keeping the securities in store and for trading them whenever desired.
The National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) are the two main demat account registration platforms in India and every demat account creation and maintenance is done as per the norms stipulated by these two agencies.
With the passage of the Depository Act in 1996, the whole system of operating a trading account for shares and securities became much streamlined and easy to maintain. Owing to the very nature of trade account operations, the earlier system was cumbersome and had many hassles in the shape of complexity of operations, lengthy and inefficient practices and long procedures.
The introduction of demat account based on electronic mode of holding securities and shares has proved to be a game changer and the whole method has become very easy today.
Paperless demat account or the digital demat account offers significant advantages which can be tapped for multiple benefits. The benefits are listed as follows:
Benefits of Paperless Demat Account
- Secure operations:
Demat account acts as a channel between you (i.e. the investor) and the depository. This means that you have secure access to your investment information and can keep track of it is a safe manner.
Since there is no paperwork involved, therefore, there are no chances of any misinterpretation or errors in the data. Besides, on account of no paperwork involved, there is also no possibility of any malpractice such as theft or forgery of any document etc.
- Cost effectiveness:
Earlier, owing to the complex nature of document checking, processing etc., the involved costs were large. Besides, there was a requirement of stamp duty as well. Now, with demat account, all this has been eliminated.
The whole process of registration, proof of ownership of shares, certificates from the registration authorities etc. can be sent and received online. This has reduced the costs involved in deposits of shares and securities.
- The question of odd lot:
Earlier, when much paperwork was involved, there was the issue of odd lot, which meant that there were restrictions on the shares that could be sold. The shareholders could not sell their shares in odd lots.
However, with demat account all these hassles have been removed. If you have a demat account, you can trade in even one share if you desire so.
Procedure to Open a Paperless Demat Account
The procedure for opening a paperless, demat account is very simple and can be done online by following simple steps.
The procedure is simple and can be completed within a matter of minutes. Following are the steps involved for opening a paperless demat account:
- You have to log on to the website of a trusted brokerage firm like Tradebulls.
- First of all, click on the tab for opening of a demat account and submit the required details like name, registered mobile number, PAN card and bank details etc.
- Fill up the account opening form and submit the required documents as your identity and address proof, along with your photographs.
- The personnel of the firm will then contact you for verification of the submitted details and will then process your application.
- After processing of the form and the submitted documents, the demat account will be set up and you will be given your demat account number and ID. These serve as your log-in credentials.
- There is a fee involved for annual account maintenance and monthly transactions as well and varies from one firm to another. Moreover, as a demat account holder, there is no requirement of any minimum share balance.
With a trusted firm like Tradebulls, the entire procedure is completed smoothly in efficiently.
There is no additional charge or fee involved and the registration is authenticated securely within minutes. In order to know more and to open your demat account with us, connect with our advisors at online@tradebulls.in or 022-40001000.