Demat Account Basics

Definition of Demat Account
Demat Account is an account where you can maintain an account of stocks you have in an electronic format. Demat Account or Dematerialized account is a safe and convenient means of holding securities just like a bank account is for funds. Today, practically 99.9% settlement (of shares) takes place on demat mode only. Thus, it is advisable to have a Beneficiary Owner (BO) account to trade at the exchanges.
Now nobody is interested to keep shares in physical forms and going for electronic based filing of shares. This has changed the style of operation in main Indian stock markets like BSE Sensex ( Bombay Stock Exchange Sensitive Index) and Nifty (National Stock Exchange of India) and its brokers.

How to Open a Demat Account
To start dealing in securities in electronic form, one needs to open a demat account with a DP of his choice. It is like opening a bank account. You have to approach a depository participants to open an online trading or demat account. Most of the banks are DPs too.
There are many private banks and also private sectors which opens Demat Account and give good service. These company and sector has their different rules and regulation and charges. Some of the banks and sectors where you can open your demat account:
ICICI bank
HDFC bank
Centurion Bank
SBI bank
Eureka Securities
Sharekhan
India Infoline
Indiabull
Religare
Reliance money
Geojit

Depository
The two depository, NSDL and CDSL is responsible for keeping stocks of investors in electronics form.
NSDL stands forNational Securities Depository Ltd
CDSL stands for Central Depository Services Ltd

Depository Participants
DPs are agents who connect depository with Investors. It is like a bank branch with which you can open a demat account to buy or sell shares.

Charges and Fees
There will be an annual account maintenance fee and a transaction fee for your demat account and it will vary between DPs.

Documents required for opening a Demat account
Few documents with the application form is required to open a demat account. As per latest Govt of India rule PAN (Personal Account Number) card is must for opening a demat account. The documents required to open a demat account are
1. Photo Copy of PAN Card (Mandatory)
2. Two Passport size photos
3. Address Proof – Ration Card/Passport/Driving License/Voter’s ID Card/BSNL Telephone/LIC Policy
4. Latest Bank Statement and photocopy of Bank Passbook

Who can open a Demat account
Anyone who is above 18 years old and wish to open a demat account.