Demat accounts and trading accounts are central to the operational framework of a modern-day securities market. While the former is required to safely hold demat securities, the latter is used to place buy and sell orders in the market.
With the increasing usage of technology and Internet services, it has become convenient and accessible to open demat accounts. In this article, we shall discuss the process of demat account opening, and some precautions you should take while using a demat account.
Online Demat Account Opening Process In India
Over the past few years, the demat account opening process has become largely seamless. All you have to do is keep some Know Your Customer documents handy, and complete the online demat account opening process. Here are the steps you can follow to open an online demat account in India.
- Visit the official website of NSDL or CDSL.
- Select the option for demat account opening.
- Choose a depository participant from the list of authorised DPs.
- Select a demat account offering that carries the required features and feasible demat account charges.
- Fill the online demat account opening form.
- Upload the requisite documents, including copies of your PAN card, proof of identity and address, proof of income, and latest passport size photographs.
- Carry out video KYC to complete In-person Verification online.
- Submit your demat account opening form.
Major Precautions To Take While Using Demat Accounts
Once the process of demat account opening is complete, the selected depository participant shall share the account credentials with you. Subsequently, you can access your demat account on the DP’s official website or mobile application, and the website or CDSL or NSDL (depending on which depository you have chosen for the account). While operating your demat account, you must be mindful of certain precautions such as
1. Set A Strong Password For Your Demat Account
After the opening of your demat account, you must set a strong password for the account. It is important to keep changing this password periodically.
2. Enable Two Factor Authentication For The Account
You can make your demat account more secure by enabling Two Factor Authentication. Doing so would add a layer of protection to the access for the account. In addition to a password, a One Time Password shall be required to log in to the account.
3. Access Your Demat Account On A Regular Basis
It is pivotal to keep checking your demat account on a regular basis. You must log in to the account and check transaction statements as frequently as possible.
4. Pay Your Demat Account Charges On Time
Another key precaution to follow post demat account opening is paying all your demat account charges on time. You must carefully study the schedule of demat account charges before account opening, and gauge which charges will be due from time to time. Your DP shall also intimate you about various demat account charges as they fall due.
5. Never Share Demat Account Login Credentials
You must never share your demat account login information with anyone. Sharing your account credentials with a third party can compromise the safety of your demat account.
6. Avoid Inactivity In Your Demat Account
If you do not use your demat account for a 12-month period, it can be classified as a dormant account. Therefore, you must avoid prolonged inactivity in the demat account.
7. Check Your Demat Account Statements On Time
Your DP shall share demat account transaction and holding statements from time to time. It is critical to go through such statements and identify discrepancies, if any.
The Bottomline
By following some easy precautions, you can ensure the safety of your demat account to a significant extent. It is important to use only official platforms to access your demat account.
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