There are a myriad of ways in which technology has transformed processes and made our lives easier. For instance, you can order groceries online and pay utility bills without having to send in long queues.
One of the processes that has been revolutionised with the application of technology is securities trading. Gone are the days when an investor had to be physically present at a stock exchange to place buy and sell orders.
Now the entire process of trading is electronic and facilitated by a closely intertwined interface between stock exchanges, depository participants, and stock brokers. You can open a paperless demat account and trading account and start trading.
What Is A Demat Account
A demat account is a digital vault where the securities purchased from the securities market get stored in a dematerialised form.
When you buy shares, mutual funds, bonds, etc. from the market, the securities get credited to your demat account (once the settlement of the transaction is complete).
Demat accounts are largely safe, highly accessible, and cost-effective. By buying demat securities, you are spared the worry of safely storing physical certificates. Another advantage is that the usage of paper in the process is significantly reduced.
What Is A Trading Account
A trading account is, as its name suggests, an account through you which you can trade in the securities market. Once you have opened a trading account, you can directly place buy and sell orders in the market through the selected broker’s trading platform – website or mobile application.
There is a direct interface between trading accounts and stock exchanges, thereby eliminating the need for middlemen or any potential bias in investing decisions. Digital trading accounts have been instrumental to the growth and increased accessibility of the market.
Process To Open Demat And Trading Account Online
Should you wish to participate in the securities market in India, you shall be required to open a demat and trading account. Both accounts can be opened online through a paperless process. You can choose to open demat account and trading account with separate entities.
Alternatively, you can save yourself the hassle of opening two accounts by opting for a two-in-one demat and trading account. Here are the steps you must follow to open a paperless demat and trading account.
1. Select A Brokerage Firm That Offers Trading And Demat Accounts
The first step towards opening a combined demat and trading account is searching for an authorised brokerage house that offers both types of accounts.
You can either research this information or visit the official website of the National Securities Depository Limited or the Central Depository Services Limited to access a list of authorised depository participants.
2. Fill The Online Demat And Trading Account Opening Form
Once you have selected a brokerage house to open your demat and trading account with, you must access their official website and locate the demat and trading account opening form/ option. Then you must fill all the required details in the account opening form.
3. Submit The Required Documents
You shall be required to submit certain documents with your demat and trading account opening form. These documents include copies of your Permanent Account Number (PAN) card, proof of identity, bank account details, proof of address, and latest passport size photographs.
4. Complete The Process Of In-Person Verification
After the submission of the demat and trading account opening form and the relevant supporting documents, you must proceed with the In-person Verification step to confirm your identity to the brokerage firm/ depository participant.
5. Access Your Demat And Trading Account
Once the account opening documents have been verified, the selected broker shall open your demat and trading account. Your account related information would be shared with you through your registered email address. It is advisable to login to your demat and trading account on the official portal of the brokerage firm, and check/ update your login credentials and profile information (as required).
To Sum It Up
By following a few easy steps, you can open your demat and trading account without the usage of any paper. Not only can you start your investing journey in the market without a cumbersome account opening process, but you can also do your bit in protecting the planet in the process.
