A Demat account is essential for investors who want to trade in India. It is an electronic account that holds your securities such as stocks, bonds, and mutual funds in an electronic format. With the increasing popularity of online trading, investors need to know how to use a Demat account online in India. Here are some steps to help you use a Demat account online and also know how to make a demat account:
Open a Demat account
The first step to your question – how to make demat account is to open a Demat account with a depository participant (DP) such as a bank or a brokerage firm. You can also open a Demat account online through a broker’s website or an online trading platform. To open a Demat account, you need to provide your personal and contact details, as well as your PAN card and address proof. Once your account is created, you will receive your client ID and password to access your account.
Link your demat account with your trading account
Once you open a Demat account, you need to link it with your trading account. Your trading account is where you place buy and sell orders for securities. By connecting your Demat account with your trading account, you can easily transfer securities between your Demat account and your trading account. You can link your Demat account with your trading account through your broker’s website or trading platform. This is when you open trading account online.
Buy and sell securities
To buy or sell securities online, you need to log into your trading account. Once you are logged in, you can create buy or sell orders for securities. If you place a buy order, the securities will be credited to your Demat account once the transaction is complete. If you place a sell order, the securities will be debited from your Demat account and the sale proceeds will be credited to your trading account. It is imperative to note that you need sufficient funds in your trading account to make buy orders. In addition, you need sufficient securities in your Demat account to place sell orders.
Monitor your investments
With a Demat account, you can monitor your investments online. You can view your account balances, transactions, and statements online. You can also view the current market value of your investments and track their performance. This makes it easier to make informed investment decisions once you know how to make demat account.
Access to corporate benefits
A Demat account also offers access to corporate benefits such as dividends, bonus shares, and rights issues. When companies announce dividends or issue bonus shares, these benefits are credited directly to your Demat account. This eliminates the need to physically collect dividends or bonus shares from the company. As well as participating in rights issues online, you can open a trading account online using your Demat account.