It is mandatory for every investor to have an active account from where he/she can carry out his or her transactions. The procedure to open this account is fairly simple. Follow these four steps to begin trading:
Step 1
First thing, you have to choose is the depository participant you want to engage with while trading. This is a crucial step, as the Depository participant you choose will assist you in buying and selling shares and will handle your account. You can refer to the list of valid DP’s, which is available on the official website of CSDL and NSDL. Once you have chosen your depository participant, the organisation will assign you an agent. This person interacts with the client or investor on behalf of the organisation. Any queries you have concerning your transactions can be addressed to this agent.
Step 2
You then have to fill out an account opening form. For opening your account, you need to verify certain details. These requirements can vary from one organisation to the other. You will need to have original and valid photocopies of your identity proof as well as a proof of your address.
Step 3
The account opening procedure will also involve a verification process. This process will mostly be an in-person interview that will be conducted under the supervision of your depository participant. This process will verify whether all the details provided are legitimate or not. Once this process is over, and the details provided match up, your request will be approved.
Step 4
There are certain fees you will have to pay the depository. This fee will include a maintenance fee. The company charges the demat holder a maintenance fee because handling and organising the shares electronically requires advanced technology which is hard to maintain. The other fee that the account holder may charge you is a conversion fee. This fee is charged for converting the physical share into an electronic format. Keep in mind that some companies charge a fee on every transaction made, however, this fee may differ according to the transaction made.
There are various benefits involved in opening an account that facilitates your trade. Here are some of the most common merits: