Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

All You Need to Know to Open a Demat Account

By Mike Subscribe to RSS | April 26th 2012 | Views:
loading
 
  



For a rookie, who wants to start investing in the stock markets, the most important step in getting started is to open a demat account. By opening a demat account, a person would be able to trade in securities. So, what is a demat account and why is it needed?

A demat account is the short version of dematerialized account, an account which is mandatorily required to be possessed by a person who trades in securities listed on Indian Stock Exchanges. This mandate comes from Securities & Exchange Board of India (SEBI), the regulatory body for Indian stock exchanges.

It is also very important to understand the role of a depository and a depository participant (DP). A depository is a provider of facility for holding securities in electronic form. Just how a bank keeps money for an individual, a depository keeps securities like shares, debentures, bonds, etc. Currently, there are two depositories in India. They are National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). DP is an agent of the depository who is authorized to offer depository services. These are typically financial institutions, banks, share brokers who register themselves as DP.

It is important to note that a demat account cannot be opened directly with a depository. One has to compulsorily open a demat account with a DP. There is no restriction on the number of demat accounts that a person can open. As per his/her choice and the quality of services offered, one can choose the DP. If a person wishes to open a demat account in the name of joint holders, then even that is possible. There can be maximum three account holders i.e. one main holder and two joint holders.

In case of a minor, a demat account can be opened. However, the account needs to be operated by a guardian until the minor becomes a major. Here, the guardian needs to be a father or in his absence, mother. In the absence of both, father or mother, the guardian can be appointed by court. However, a minor cannot be a joint holder.

It is very important to open a demat account online as this will enable you to transact in stocks listed on the stock exchanges at the click of a button. It can be operated from anywhere, as all you need to do is, login to your account from a computer/laptop/smartphone and start trading in stocks. So get started in this journey of money making. All the best!

Mike - About Author:
Kotak Securities is one of India’s leading share broking firmoffering stock trading, mutual fund and IPO investing service’s along with a research division specializing in Sectoral research and Company Specific Equity Research. Express your views on their Facebook Page and Twitter Handle (@KotakSecurities) or you can also browse through their various videos on YouTube and Slide Share.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/finance-articles/all-you-need-to-know-to-open-a-demat-account.htm

Related Finance Articles Subscribe to RSS

No bank account still no worries for cash
Published by Alice Johnsonn on December 29th 2011 | Finance
needs to resolve the financial emergency then do not wait any more as Cash loans without bank accoun...
 
The Benefits of Financial Advice Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
You work hard for your money and you therefore need to ensure that you properly manage it so that yo...
 
The Benefits of Financial Advice Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
You work hard for your money and you therefore need to ensure that you properly manage it so that yo...
 
Pensions in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Pension is a money received after retirement or end of a work agreement. It is mostly associated wit...
 
Pensions in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Pension is a money received after retirement or end of a work agreement. It is mostly associated wit...
 
Pension in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Leeds has many financial advisors especially those dealing with pension. Pension is very important e...
 
Pension in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Leeds has many financial advisors especially those dealing with pension. Pension is very important e...