The Demat Account: You must know it well

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The modern technology has not spared a single sphere of the life, and hence the stock market also has upgraded over a period where from the use of paper it has moved to the virtual shares in dematerialized form. To park these shares one needs to have an account with the exchange that is called Demat Account. There are two organizations in India which are authorized to open a Demat account, and they are known as NSDL and CDSL. They charge a small amount for the account opening and maintenance. 

The Demat and trading account are required by everyone who wants to buy and sell the shares in the stock market. 




The requirement of trading and Demat account:

Those who want to invest in the stock market need to have a Demat as well as trading account. With the help of the trading account one can carry out the required trade but if the trade is of delivery nature, he needs to park the shares bought, and it can be parked in a Demat Account only. The trading account can also be used to carry out intraday trading. To get the best Demat account, the client can check the schemes offered by various broking firms over a period. 

How to trade:

The trading in any of the system is very simple irrespective of the fact that it is an online trading or an offline one. However, the style of trading is different in an online account that the offline one. In the offline trading, the client has the support of the bolt operator who handles the account. He monitors the movement of the share prices, and if the client asks to buy or sell any shares, he places the order for the same. He also updates the client once the order is executed or there is no probability of the execution of limits. Hence the client does not need to monitor the account or keep on checking the price of the shares as the operator is there to handle such things. 

In the online account, the client has to look after the account personally. He needs to place the order himself or also check if the order is executed or not. He needs to carry out the trade on a computer or a smartphone with an active internet connection. 

Some important points: 

The trading account has a number of terms and conditions which the client must know. The broker offers the credit on the margin fund which differs from broker to broker. Many of the broking companies also charge interest on credit funding above the limit of the days, and hence the client must know all these terms before opening the account and trading in it. There is also brokerage as a fixed rate of turnover or a lump sum amount which one must know in advance. The billing cycle and withdraw of amount also has limits which the client must know while going for opening the account with the concerned service provider.
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