A demat account is an Indian term for a dematerialized account that holds

financial securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

(equity or debt) digitally and to trade shares in the share market. In India, demat accounts are maintained by two depository organizations: the

National Securities Depository Limited National Securities Depository Limited (NSDL) is an Indian central securities depository, based in Mumbai. It was established in August 1996 as the first electronic securities depository in India with national coverage. It was established base ...

and the

Central Depository Services Limited Central Depository Services (India) Ltd. (CDSL), the first listed Indian central securities depository, was founded in 1999. The main function of CDSL facilitates holding and transacting in securities in the electronic form and facilitates set ...

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depository participant In India, a Depository Participant (DP) is described as an Agent of the depository. They are the intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between ...

(DP), such as a bank, acts as an intermediary between the investor and the depository. In India, a DP is described as an agent of the depository. The relationship between the DPs and the depository is governed by an agreement made between the two under the Depositories Act. The demat account number is quoted for all transactions to enable electronic settlements of trades to take place. Access to the dematerialized account requires an internet password and a transaction password which allows the transfers or purchases of

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

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security Security is protection from, or resilience against, potential harm (or other unwanted coercive change) caused by others, by restraining the freedom of others to act. Beneficiaries (technically referents) of security may be of persons and social ...

is a tradable financial asset; the term commonly refers to any form of a financial instrument, but its legal definition varies by jurisdiction. Purchases and sales of securities on the demat account are automatically made once transactions are confirmed and completed.

Types of demat accounts

There are three types of demat accounts offered by depository participants: * Regular demat accounts * Repatriable demat accounts (allows foreign funds and transfers abroad) * Non-repatriable demat accounts

Fees

There are four major charges usually levied on a demat account: account opening fee, annual maintenance fee, custodian fee and transaction fee. Charges for all fees vary by depository participant. * Account-opening fee - There may not be an opening account fee. Private banks do not have one, but other entities do impose an opening fee. * Maintenance fee - This is also known as folio maintenance charges, and is generally levied in advance. It is charged on an annual or monthly basis. * Custodian fee - A fee for holding the securities. * Transaction fee - A fee per transaction.

Documents required

Opening a demat account requires providing documents that fulfill the requirements of

Know Your Customer Know Your Customer (KYC) guidelines in financial services require that professionals make an effort to verify the identity, suitability, and risks involved with maintaining a business relationship. The procedures fit within the broader scope of a ...

References

External links

Central Depository Services Limited website
{{DEFAULTSORT:Demat Account Securities (finance) Stock market Financial services in India