Demat Account- What Are The Key Points About It?

Before electronic trading, stock transactions used to happen in the financial market by using physical certificates of shares. This traditional method was full of flaws. There was a high occurrence of issues related to theft, forgery, and misuse of physical copies. The advent of electronic clearing systems and intermediaries like clearing systems enabled a new era of online trading.




Post-liberalization, after multinational companies, started entering the financial space. The new system of "dematerialized shares" was introduced. The entry of private players in financial services and advent of new technology in trading helped introduce the concept of "dematerialized shares”.


The traditionally used physical shares were transferred into electronic format and then stored in a digital account. This process of transformation is called "dematerialization". The digital account being used for storage is called a “demat account”.


Moreover, opening the demat account is also very simple. You do not have to visit any branch or any office to submit the documents. Everything can be handled virtually. You just require scanned copies of the following documents: 

  • Address Proof. 

  • Identity Proof 

  • Income Proof 

  • Lastly, bank account proof. 


The verification process begins from the broker’s end. The brokerage house verifies all the documents from the backend. After completing the verification process, the broker sends an E-mail with the login credentials. With that login credentials, you are all set to trade in the Indian Stock Market. 

 

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