In March 2020 the total Demat accounts in India were 40.9 million which crossed 100 million in August 2022. This shows that people have started taking more interest in online trading due to increased awareness as well as lockdown and work-from-home culture. To start trading you need to have a Demat account. .
But you must do a proper self-assessment before opening your free Demat account. Here are some tips that may help you to select the best Demat account.
Tips to Choose the Demat Account
Does the DP Provide Two-in-One Demat and Trading Account?
Firstly it’s not mandatory to have a Demat and trading account in the same place. Also, not all depository participants cum stock brokers are providing both services at the same place. But having these services at the same place makes you trade comfortably. So before opening a Demat account check if you can open both Demat and trading accounts in one place.
This issue generally arises when the broker doesn’t have a DP license. Then you have to open a Demat and trading account with different brokers. In such a case, you won’t be able to sell the shares directly. Whenever you sell the shares you will have to sign the debit instruction slip and submit it. This makes the process quite complicated.
Does the DP Allow Demat Account Access On Their Platform?
Nowadays whenever you open a Demat account then it provides you with a 2-in-1 facility. This means that you can access Demat and trading accounts from a single platform. This makes your trading experience convenient as you don’t have to log in again and again and can access both the Demat and trading accounts from one place.
Before you open your Demat account do check whether your DP is technology-savvy and has such single access. The majority of brokers today have this facility. But some of them are still lacking behind.
Have You Checked the Dp’s Online Review?
People have become quite active in the online world. If you want to see if something is good or not then you can easily verify that by checking its online reviews. So before opening a Demat account you can check the online reviews of your preferred DP. Many people would have reviewed them after taking their services.
Through this feedback, you will come to know how good their services are. This will help you in deciding where you should open your Demat account.
Check If the DP is Providing Data Analytics Services
Depositories now are not just limiting them with basic Demat and trading-related services. They have started providing additional services like online data analytics. This data analytics service includes services like real-time valuation, call-to-action requests, industry concentration, analytics on Demat inflows/outflows, thematic concentration etc.
These services help you to make decisions regarding trading and investing. Therefore you shall see if this service is provided by your depository or not.
The number of people who take interest in online trading in India has increased after the lockdown. So if you are also planning to start trading and open a Demat account then this article will work as a guide for you. It gives you a brief idea of what basics shall be followed and what care should be taken before opening a Demat account.