If you are interested in investing in the best demat account in India stock market or other financial instruments, you need to open a Demat Account first. A Demat Account is an electronic form of holding and trading shares, bonds, and other derivatives. As a financial trader in India, you cannot trade the stock market without a Demat Account. In this guide, we will take you through the nuances of choosing the best Demat Account that suits your investment style.
Understanding Demat Accounts: What You Need To Know
A Demat Account is an electronic account where your shares and securities are held as electronic records instead of physical certificates. All your stocks, bonds, and securities holdings are credited and debited to this account when you buy or sell them. It is a must-have for international trade in India. The government of India made physical shares conversion into Demat form compulsory in 1996 to curb fraudulent practices.
How does it differ from a trading account?
A demat account is distinct from a trading account. A trading account is used to execute buy and sell orders, while a Demat Account holds securities. The shares are bought and sold in the trading account, and the balances are reflected in the Demat Account.
Factors To Consider When Choosing A Demat Account
The brokerage fee is the charge the broker takes to execute the transaction on behalf of the trader. It is expressed as a percentage of the transaction value. Brokerage includes transaction charges, securities transaction tax, service tax, and stamp duty. Some brokers also charge an annual maintenance charge, which starts after the first year of holding the account. You must select a Demat Account that offers reasonable brokerage fees to maximize your profit.
Availability of trading platforms
The broker’s trading platform is where you execute your trades. Brokers offer a wide range of platforms, including desktop, mobile, and web-based. You must choose a broker that offers an easy-to-navigate platform with relevant tools, charts, and market updates to assist you in trading.
Research and Advisory Services offered
Most brokers offer research advice and advisory services to help their clients make informed trading decisions. These services include reports, company updates, and recommendations on stocks and other securities. You must choose a broker that provides sound research advice and advisory services to make informed decisions concerning your investment.