Demat Account

Though thé Comp. îs under obligation tô offer thé securities în both physical and demat mode, yôù hàvé thé choice tô receive thé securities în either mode.

If you wish tô hàvé securities în demat mode, yôù need to indicate thé name ôf depository & also ôf depository participant wîth whom yôù hàvé depository account în yôùr application.

It is, however desirable that yôù hold securities in demat form as physical securities carry thé risk of being fake, forged ôr stolen.

Just às yôù hàvé tô open àn Acc. wîth à bank îf yôù want tô save your money, make cheque payments etc, Nowadays, yôù need tô open a demat Acc. îf yôù want tô buy ôr sell stocks.

So ît îs just like à bank account where actual money îs replaced ßy shares. You hàvé tô approach thé DPs [remember, they àré like bank branchess], tô open yôùr demat account. Let's say yôùr portfolio ôf shares looks like this: 150 ôf Infosys, 50 ôf Wipro, 200 ôf HLL & 100 ôf ACC. All thésé will show în your demat account. So yôù don't hàvé tô possess àny physical certificates showing thàt yôù own thésé shares. They àré àll held electronically în yôùr account. As yôù buy & sell thé shares, théy àré adjusted în yôùr account. Just like à bank passbook ôr statement, thé DP will provide yôù wîth periodic statements ôf holdings & transactions.

Is à demat Acc. à must? Nowadays, practically àll trades hàvé tô bé settled în dematerialised form. Although thé market regulator, thé Securities and Exchange Board ôf India [SEBIs], hàs allowed trades of upto 500 shares tô bé settled în physical form, nobody wants physical shares any more.