Demat Account and its Process - By Choice Broking

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Demat Account and its Process

• A guide by Choice Broking

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What is Demat Account ?
Demat account is the account that should be open
to buy or sell shares in the stock market. A
Demat Account is an account that allows investors
to hold their shares in an electronic form.
Stocks in Demat account remain in dematerialized
form.
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Dematerialization is the process of converting
physical shares into electronic format. The demat
account number is quoted for all transactions to
enable electronic settlements of trades to take
place. So a demat account is a must for trading
and investing. Demat account functions like a
bank account, where you hold your money and
respective entries are done in bank passbook. In
a similar form, securities too are held in
electronic form and are debited or credited
accordingly. A demat account can be opened with
no balance of shares. You can have a zero balance
in your account.
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• How to Open a Demat Account

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Types of Demat Account

• There are 3 main types of demat accounts
• Regular Demat Account
• A regular demat account used by investors
  residing in India.
• Repatriable Demat Account
• A demat account used by NRIs under which funds
  can be transferred abroad. This type of demat
  account requires an NRE bank account associated
  with it.
• Non-Repatriable Demat Account
• A demat account used by NRIs under which funds
  cannot be transferred abroad. This type of demat
  account requires an NRO bank account associated
  with it.

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How does a demat account operate?

• If you are familiar with physical trading, then
  electronic trading would be a cakewalk for you as
  both are similar in nature. To familiarise
  yourself with the online trading process, read
  the steps mentioned below
• Go to your online trading account and start by
  placing an order. However, for this process, it
  is important that your demat account and trading
  account are linked.
• Once you are through your order, your order will
  be processed by the exchange.
• Your demat account will then tally the market
  prices of the shares you are looking to invest
  in. Before the last stage, your demat account
  checks for the availability of the shares.
• Once the process is complete, your shares will be
  reflected in your demat account.
• If you wish to sell your shares, you need to
  provide a delivery instruction note containing
  the details of the stock you wish to sell.
• After selling your shares, these will be debited
  from your account and the money earned from it
  will be credited to your trading account.

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TO OPEN YOUR FREE DEMAT ACCOUNT CLICK HERE