What is a Demat account?
A Demat account is where your shares and securities are held electronically in an electronic account instead of the traditional physical manner. As an investor, you must have only the best demat account in India to get the ideal returns you want. When you open a demat account there are certain factors you must know. Given below are a few certain facts associated with his account which will help you during the long process of investing.
Features Of The Account
Before you open a demat account you must know the basic features of the account. One of the main features you must understand is the DIS and RIS. The DIS is known as the delivery instructions slip and the RIS is known as the receipt instructions slip which is required to sell or buy securities. This contains all the information and all detailed instructions for the transactions to take place. In addition to this, there are several other beneficial features of this account. This includes loan against securities. Some of the best demat account in India which holds shares, debentures, bonds or even mutual fund units can be used as collateral to avail of a loan.
Another factor you must know before you open a demat account is the depositary. The depository is a form of a bank where these securities are held in electronic form. The best demat account in India are held in either of the two depositories which include the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The depositories act allows investors to use certain set of services through the depository participants, which in this case, are the banks that hold your account. Some of the depositary demat accounts include resident individual, non- resident Indian (NRI), Hindu undivided family amongst many others.
Re-Materialization And Dematerialization
Your stocks will be held in either a physical form or an electronic form. Dematerialization is the process where these physical securities are converted into an electronic format. This required for any demat A/c. Through this process it makes it easier to transfer the securities to another account. Additionally, it will not attract any stamp duty. The reverse of dematerialization is known as re- materialization which includes converting your electronic securities into physical securities. In such a process, it is important that you refer to your tariff or branch for remat charges during submission of your remat request. Mostly commodity customers can refer this process to claim their securities.
A demat A/c can opened under a single name. Additionally, some institutes even offer joint account holders, with a maximum of three holders for one single holder. In such a case, there would be only a single main holder and two joint account holders. Once this effect takes place, it cannot be changed.