DEMAT Account03.19.08

Dematerialized account or a DEMAT account is a account which holds your securities in a demat mode. A company is obliged to give away shares in both modes like physical and DEMAT modes, the general preferred choice of holding stocks these days are through demat mode.

To hold your securities in DEMAT mode, it is necessary that you have a depository and a depository participant(DP) with whom your depository account is maintained. To start a DEMAT account is no big deal these days, its as simple as starting a bank account. With a DEMAT account you can buy and sell shares when you want to. Though to start a DEMAT account, a PAN card is compulsory as per the government regulations.

Once you start a DEMAT account with a DP who will provide you a virtual account wherein your shares are listed. This means you do not have to safeguard the physical copies of your share. As you buy or sell stocks, the same reflects on your account as credits and debits of the particular share. Like withdrawing or depositing money in a bank, this account maintains your shares and stocks.

With the advent of Internet and electronic media, not many prefer to keep shares in physical forms as they run the risk of getting stolen or faked. So owning a DEMAT account these days is as important as having a bank account since it will help in investment and trading.

Also most banks are (Depository participant)DP these days like ICICI Bank, Canara Bank and as are many individual broking companies like JRG and the like.

NSDL and CDSL websites have a comprehensive list of registered DPs. A broker is different from a DP in the way that broker is a member of the exchange and buys and sells stocks for himself and for his clients whereas a DP will only give you a account.

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