Bag The Cash: April 2008

Apr 3, 2008

What is Demat Account ?

Demat refers to a dematerialised account.

Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, you need to open a demat account if you want to buy or sell stocks. So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account.

Example:-
Let’s assume your portfolio has 200 of Satyam, 100 of IBM and 30 of TCS shares. All these will show in your demat account. So you don’t have to possess any physical certificates showing that you own these shares. They are all held electronically in your account. As you buy and sell the shares, they are adjusted in your account. Just like a bank passbook or statement, the DP will provide you with periodic statements of holdings and transactions.

As the holdings are fully computerised you must keep an eye on the transactions and in maintaing a file.

You can create your Demat account in Karvy, Ing vysya, ICICI, SCHIL. and some.. moree