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What Is DEMAT Account – an introduction

DEMAT account is a facility that allows investors to hold shares in an electronic format. A demat account acts exactly like a bank account, which you use to transfer and receive money without using actual paper money. In this case, a DEMAT account enables you to electronically buy and sell shares on the stock market, without having to exchange physical share certificates.

To initiate transactions, you will need to log in to your demat account, using a client ID (provided by your brokerage firm, for example, Kotak Securities) and a password.

A DEMAT account also acts like a safe deposit – it holds the certificates of your financial instruments like shares, bonds, government securities, mutual funds and exchange-traded funds (ETFs) in a dematerialized form.

Wondering what is DEMATERIALIZATION? It’s simple.

Dematerialization is the process of converting share certificates from physical to electronic format.

By holding your certificates in dematerialized form, you:

- gain higher security and escape forgeries

- successfully avoid hassles of managing and maintaining physical documents which can decay, disappear or be damaged

Since India has shifted to dematerialized share certificates, you compulsorily need a DEMAT account before you start to trade on India’s stock exchanges.

Benefits of having a demat account

• ZERO RISK:

Dealing with physical share certificates can put you at the risk of:

- Forgery – forging a copy of a paper is easy, using a demat account to store your shares electronically will help you avoid such a situation

- Loss – with our busy schedule, losing or misplacing a paper is commonplace. Using a demat account ensures that all your shares are stored in one place, safely

- Damage of paper or ink – over time, papers decay and inks erode. Using a demat account ensures there is a permanent, digital record of your transactions

In the demat form, certificates last forever and opening a Demat Account with Kotak Securities puts you at zero risk


• ZERO PAPERWORK:

When you use a demat account to buy and sell shares, all your certificates are in electronic form - thus transactions are hassle-free and less cumbersome. When you trade shares or other financial instruments, there is no need to actually hand over certificates to the buyer or seller.

After opening a demat account, you will have to deal with zero paperwork.


• ZERO COST:

Dealing in physical securities involves a lot of additional costs such as handling expenses, stamp duty as well as for safety. These are very hard to determine beforehand. All these are eliminated when maintaining a demat account. Since the brokerage charges you have to pay are detailed in advance, you pay zero hidden costs.


• ZERO TIME:

Buying and selling shares through your demat account in electronic format is instant. Earlier, exchanging physical certificates used to take weeks, if not months. This means transactions become seamless and inexpensive. And transactions require zero time.

Advantages of a Kotak Securities demat account

Opening a demat account with Kotak Securities comes with the following great advantages:

  • Three-in-one account - DEMAT account, trading account and a bank account with Kotak Mahindra Bank, bundled together in one hassle-free account opening process - you will not have to open three accounts separately, but instead do so with a single application form. Also, you won’t have to manually transfer money to your trading account from your bank account. The required funds get credited automatically. (Alternately, you may also choose to open only demat and trading account with us, and continue to use your existing bank account for fund transfers)

  • Free Intraday Trading – A DEMAT account with Kotak Securities comes with free intraday trading. Which means, when you buy and sell your shares on the same day, you do not pay us any brokerage! (As per SEBI norms, brokerage cannot be zero, so we charge an almost negligible 1 paisa per trade)

  • Margin Facility – Usually, you buy shares using your own money. However, sometimes when you do not have sufficient funds in your demat account, some shares can look very tempting. Instead of passing on the shares, you can use our margin trading facility and borrow money from us to invest in the stocks.

  • Stock Trading mobile app – Opening a demat account with Kotak Securities gives you access to our mobile app (available on iPhone and Android). This app enables you to browse live stock market news, share price updates, your portfolio and fund transfer facility

  • Stock Research reports – Our trained financial and equity analysts

How to open a demat account – Procedure

Step 1: Fill up demat account opening form
Step 2: Submit Documents
Step 3: In-person Verification
Step 4: Once the process is complete you will be provided with the Account Number / ID

When you fill up the short, demat account opening form on our website, you will receive a call from a Kotak Securities customer care executive within 3 minutes on a working day. This call helps us understand:

a) If you have valid Pan Card and Aadhaar Card,
b) Your location, so we can assign a Relationship Manager (RM)

You then have to submit copies of these documents to our Relationship Manager, who will collect it from any location convenient for you. This also completes the mandatory in-person verification required to open a demat account.

On the completion of the above procedures, you will receive your Demat Account number and Client ID on your email as well as by post.

The demat account opening procedure at Kotak Securities is hassle-free and does not take more than a few days.


Documents required for a demat account with Kotak Securities

  • Filled application form for opening DEMAT account

  • Passport size Photographs

  • Proof of identity (Aadhar Card, Driving License, Voter Id)

  • Proof of address(Aadhar Card, Passport, Driving License, Voter Id)

  • Copy of PAN card

Why Demat Account?
  • Mandatory by SEBI
  • Easy Portfolio Management
  • Security of Equity Investments.
Reach Us
4 Reasons Why you need a Demat?

Read More >


Demat Account Charges

Demat Fees

Sr.No. Account head Rate Minimum payable
1 Dematerialisation Rs.50/- per request and
Rs.3/- per certificate		 --
2 Rematerialisation Rs.10/- for 100 shares Rs. 15/-
3 Regular (Non- BSDA Account ) Market/off-market Transactions(Sell)  

BSDA Account Market/off-market Transactions(Sell)		 0.04% of the value of securities(Plus NSDL Charges) 



0.06% of the value of securities(Plus NSDL Charges)		 Rs 27/-(Plus NSDL Changes) 

Rs 44.50/-(Plus NSDL Charges)
4 Regular Account Maintenance Charges RESIDENT- Rs 65 p.m for upto 10 debit transactions.Rs 50 p.m. for 11 to 30 debit transactions.Rs 35 p.m. for more than 30 debit transactions.NRI-Rs 75 p.m. --
5 Pledge charge 0.05% of the value of securities Rs. 30/-
6 Invocation of pledge 0.04% of the value of securities Rs. 30/-
7 Other charges :-
a) Charge for Client Master change intimation
b) Charges for CAS
Rs.25/-

Rs. 3 per month		 --

A Brief history of the Demat Account:

Just like the whole world, the stock markets too have undergone a significant change since the time of its inception.

When the Bombay Stock Exchange, the oldest in Asia, was founded in 1875, it was an open outcry floor trading exchange. This means traders would buy or sell stocks by verbally shouting prices on an open floor. Today, it is vastly different. It is an electronic system where you buy or sell stocks online.

Similarly, earlier, shares were physical receipts. On buying shares, you got a certificate. Over the years, people thought stock market trading was not for them because of the sheer paperwork involved in completing a transaction. Stock market settlements, wherein you receive shares if you buy or money if you sell them, were longer. In 1996, trading began on NSE for shares held in DEMAT account form. It was the beginning of a new paperless trading stock market trading environment. If you buy a share today, it gets credited to your account in two days. Today, shares get transferred to your DEMAT account.

You cannot trade in the stock market without a DEMAT account.(Open Demat Account Today)›


Here are some things to know about DEMAT account:

 

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