While a trading account is required to purchase and sell the assets, the Demat account is where everything is stored in electronic format. As investing has gone completely digital in the stock market, and dematerialization of stocks and other assets is a necessity for investors, opening it is mandatory. So, choosing it is also crucial for availing of all the benefits.
Here are five tips to open a Demat account for all your investment needs.
- Take a look at the Products & Services:
Firstly, you need to check whether the Depository Participant (DP) with whom you are opening the account provides all kinds of investment products and services or not. You must check if it has stocks, mutual funds, commodities, futures and options derivatives, and IPO. This is important because, at times, certain DPs don’t offer all the services, and if you want to invest across different products, you would then need separate Demat accounts.
Apart from products, you also need to check how much time the DP takes to settle transactions with the Depository, whether it lags or does it within the stipulated time or not. This is necessary as timing is crucial in the stock market.
- Check the Demat account charges and other fees:
There are multiple fees and costs associated with opening and using a Demat account. Some of these include account opening fees, annual maintenance charges (AMC), transaction charges, dematerialization charges, and others.
While the cheapest might not be the best option, you must find a Demat account with reasonable charges for all your services. Another thing to consider is that many DPs do not charge account opening charges but have expensive AMC. Thus, you need to evaluate both before you choose and open the account.
- Analyse the user interface:
This refers to the user interface of the online investment platform, which the DP offers when you open the Demat account. An investment platform, whether it is a mobile app or a trading terminal, is mandatory for trading and investing in the stock market.
You must check whether the platform is smooth, fast, and updated on a real-time basis or not. You should also check the mobile application features and other details for hassle-free trading and investment experience.
- Features of Demat Account:
After analyzing the above three points, you need to check all the features offered with the Demat account – whether it is a standalone account, or comes with a trading and bank account.
- Review the customer reviews:
Finally, reading customer reviews about the shortlisted accounts is vital for choosing the right Demat account for your requirements. It will give you insights about the DP, features, and services provided and if there are any hidden charges as well.
Since a Demat account is the first step towards starting your investment journey, you should always take time and evaluate all the aspects to pick the best one for your investment needs.