How do I open a demat account and trading account? What are the steps?
Before answering your question, let’s first understand what are Trading and Demat accounts?
Now a day the stock market has become completely electronic, before year 2000s generally the shares were in paper format, by the year 2000s all the paper format stocks are dematerialized to electronic format.
To transact and to maintain the financial products you need to have your trading account and a Demat account. Currently the stocks are completely maintained in an digital format in the stock market, this clearly indicates that, globally stocks are traded electronically through a network of computers.
As explained, to trade financial products you need to hold a Trading and a Demat account. These accounts need to be opened only via registered, professional stock brokers or depository participants.
What is a Trading Account?
A Trading account is an account created by the Stock brokers or depository participants, which is used to buy or sell financial products in the stock market.
By using provided trading account, investors can place buy or sell financial products either on online or via phone call to stock broker or depository participant entities, where in the stock broker or depository participant automatically directs to the stock exchanges.
What is Demat Account?
A Demat account is an account created by a Stock broker or a depository participant, this account is used to store the bought shares and sold out shares are taken from this Demat account.
Now let’s understand the process involved to open an account:
First and foremost step is to; select the stock broker or the firm. Compare the brokerage rates and other charges among different stock brokers, because most of the stock brokers give discounts on the basis of the amount of trades conducted.
Next, get in touch with the stock broker entities, enquire and collect the information about the required procedures to open an account.
Once you get assistance from the stock broker, who generally guide you for the below mentioned information.
Stock broker will assist you how to download and fill the EKYSC form on online: Generally via online you can download the EKYC form, or you can ask stock broker to courier the EKYSc form to your residential address.
For example I have downloaded the EKYSC form via a registered stock broker named Tradejini , click on the provided link through which you can download the EKYSC form, fill the form with required details.
While filling both the forms make sure that you have provided the appropriate mobile number and mail id information. .
Stock broker or a depository participant also ask you to submit the following supporting documents which serves as a Proof of identity and Address to open accounts:
· Aadhar Card,
· PAN card,
· Passbook front page photocopy,
· Passport size colour photograph,
· Income proof in case of trading in F& O segments,
· Bank Account Details.
After filling the EKYSC forms take a print and submit or courier it to stock brokers corporate entity along with the required supporting documents.
Once the stock brokers corporate entity receives the EKYSC forms along with documents the stock brokers employees will re verify the given form and documents.
If the provided forms and documents are appropriate the stock broker will upload the same on EKYC web tool online accordingly.
How long does it take to open the account can we trade immediately?
Your trading and demat accounts can be activated in less than 24 hours from the receipt of your completed application form along with the supporting documents.
On activation form the stock brokers end you will receive a TPIN to your mobile number which means Trading Partner Identification Number along with the login credentials to your registered mail ID. By using provided login credentials you will be able to conduct trades in the stock market.