If you want to begin trading or investing, the first thing you need to do is get a demat account opened. But, how to go about it, or which factors to consider before you open a demat account?
If by chance you open a demat account with a depository participant (DP), who is unable to provide good service, it can turn out to be a major hassle for you.
Therefore, this blog will explain how to choose the best new open demat account for your investments.
Keen On New Demat Account Opening? Factors To Keep In Mind
-
How Easy It Is To Open A Demat Account
Needless to say, the first thing that you should check is whether it is easy or not to open a demat account with a stockbroker cum DP.
You need to ensure that all the formalities of opening a demat account are followed by a broker. Also, the broker’s team should be thorough in terms of the documents (such as PAN card, address proof, etc.) required to open a demat account.
-
How Good Trading Software Is
Mostly all brokers have their own trading software, which you can access both through a laptop or a mobile phone. Trading software must be easy to use. At times, even reputed brokers do not have good software, which becomes a major hindrance while trading.
But, how will you know about trading software before opening a demat account? You should ask people in your circle which trading software they prefer and why. You should prefer to ask those who trade frequently, as that will give you a clear picture.
-
Costs Of A Demat Account
Then, you should consider the costs of a demat account. Typically, a demat account holder has to pay many charges to a broker, including annual maintenance charges (AMC), dematerialisation or rematerialisation charges, brokerage fees, etc. Before opening a demat account, you should compare the costs across several brokers to make a fair assessment.
-
Service Provided By A Broker
Along with the costs, you should also consider the service provided by a certain broker because both costs and service go hand-in-hand. It could be that a certain broker is more expensive than the competitors, but if it is providing much better service than others, you may consider it.
You should check whether the customer-care team of a broker is willing to understand your problems. At times, they are keen only to sell a security to earn a commission. You should always be careful of such practices.
-
Ensure That Your Demat And Trading Accounts Are With The Same Provider
Most stockbrokers in India are also DPs. As a result, they can open your demat and trading accounts through the same process. If your DP and broker are different, you need to do two sets of formalities.
Besides, if your demat and trading accounts are with one provider, then that provider can transfer shares on your behalf from your account every time you sell shares, which reduces the time taken in transactions.
-
Ensure That You Can Access Both Your Demat And Trading Accounts Through One Website
Most stockbrokers cum DP allow people to access both their demat and trading accounts through one portal. However, some of them do not provide this service, which makes it inconvenient for people to trade, as they cannot access both their accounts from one website. So, when you open a demat account next time, please check whether the broker provides this feature.
Conclusion
Opening a demat account may seem easy, but it requires paying attention to many factors. If sufficient attention is not paid to them, stock trading may turn out to be a bad experience.
So, you should be careful while opening such an account and always ask your friends, family, and acquaintances which stock broker they prefer and why.