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How to Open a Demat Account without a Broker

Date: Sep 20, 2022 | Time: 01:11:00 PM | Author: Editor News

Investing in the stock market and making quick money is a matter of interest for many a person. For investing your hard-earned money in stock marketing, you will be required to open a Demat account. The surprising figure of around 16 million Demat accounts that have been opened in the first half of the year is a strong testimony proving that very statement! This number is way more than the previous year as it was only 12.4 million.

Now that you have made up your mind to open a Demat account, you may proceed with your concerning procedures which would definitely include hiring a stock broker. However, you find that they are charging extra charges for their services which could also leave you confused. You would never know if they are planning to make money without providing you with adequate financial advice. Henceforth, the best alternative is to open a Demant account without the help of a broker. When you are opening a Demat account, you will no longer be required for massive paperwork or your physical presence.

So for now, let us learn how to open such an account all by you and without the broker.

·   You need to get in contact with your Depository Partner since these accounts are backed by Central Depository Securities Limited (CDSL) or National Securities Depository Limited (NSDL). Also, your Depository Partner or DP could be a bank or any reliable financial online platform. On the website of either NSDL or CDSL, you will get to find the list of various DPs.

·   After you have opted for the DP, you may request to open a Demat Account once contacting them. For the same, you will be asked to fill out an application, which they will be providing you. It would be a simple KYC form.

·   Then before submitting the same to the DP, you may add a copy of your Address and identity proof.

·   Finally, you should attach your bank account statements.

When the DP had verified the details that you entered, you will receive an account number and password, with which you could access your Demat Account. Once you had opened your Demat account, you have to mark a tick at the agreement comprising your rights and duties as an investor.

Now that you had figured out how to open a Demat account, you could be doubtful whether the possession of such an account is enough for trading in stock marketing. The answer to such a query would be a 'No,' as it merely acts as a repository of stocks. An investor needs to have a trading account for processing a sale or purchase. For a seamless and safe transaction during your trading in the stock market, you need to have both, along with a bank account.

You are the only owner of the securities in your Demat account and the DP that you opt for starting your Demat account will act as a broker by default. Therefore, you must choose your Depository participant wisely to not regret it later. The kind of broking partner you pick to start your Demat account with will determine whether they actively engage in your investing journey and their brokerage costs. The DP acts as a go-between between the NSDL or CDSL and the account holder. Your holdings are monitored by the two government-regulated central depositories.

Various experts say that managing a 'three-in-one scheme' accounts are the most convenient thing to do, when trading in stock markets. It is recommended so, as the amount that is earned through any financial transactions should be transferred to the bank account and not others. And, as already stated, you will be requiring both a Demat account and a trading account for hassle-free transactions and trading. Many banks currently provide this 'three-in-scheme' to the traders, if they are interested to step into such a challenging venture.

Before you are opening your Demat account, you need to take into account some factors and make wise decisions therein.

·   Chargers incurred for opening the account: Prior to choosing your DP, you must ensure that the charges they are incurring for their services such as annual maintenance charges, charges for dematerialization and dematerialization etc. are not too high or unaffordable.

·   Account creation process: As the investor is opting for Demat accounts for their ease, DPs must ensure that the account creation is smooth and hassle-free. Also, it should be done by following the strict regulations put forward by SEBI.

·    The user interface of the application: The interface of the app has to be free from any sort of lag, as investors depend on them to do their financial transactions. For selecting the most appropriate one, investors may take a look at different mobile apps from many DPs. An ideal user interface will be intuitive enough.

When you are opening your Demat account without a broker, you do not have to be concerned about the security as both NSDL and CSDL are regulated by the Securities and Exchange Board of India (SEBI). Furthermore, the only variance is that the main stock market of CSDL is the Bombay Stock Exchange and the primary market for trading and investing for NSDL is National Stock Exchange.

Bottom Line

Without any financial persons or institutions, you could invest your money in the stock market, thanks to the internet and the significant information made available on various platforms. As already mentioned, you could open a Demat account online, where you could store your shares. All you need is just a smartphone and an internet connection, and your financial transactions related to the account could be carried out. And it never matters, at which location you are present. Rebalancing of the portfolio could also be done through Demat accounts. As far as an investor is concerned when all the securities are held in a single place, his financial management would turn out to be much simpler. Yet another boon of converting your shares in an easily accessible electronic format is that investors could use them for diverse investments like exchange-traded funds, IPOs, mutual funds, bonds and others. 

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