The process of stock trading in India has come a long way since the National Stock Exchange of India was instituted in 1994. Initially, the investors had to depend on brokers to place and execute the phone orders and some of the brokerage houses even had sub-brokers as becoming a broker with Securities Exchange Board of India (SEBI) was not an easy task.
As the technology improved, the advanced the investment in equities and trading became more mainstream and hence trading accounts became more mainstream. Previously, brokers who traded in stock markets used to provide investors with a trading account to invest and trade in the equities markets, in return, they used to charge a specific percentage of trade amount being executed and hence were known as full-service brokers.
During early 90's and 2000s, investors had to trade mainly through the traditional brokerage houses which included India Bulls, ICICI Direct, Share Khan and so on, but as time passed, many brokerage houses have come into existence bringing in a sea of change in the investment process. As the years passed on the volumes in the stock exchanges expanded and the modern age technology driven brokers now charge mostly a flat fee for brokerage. The concept of demat account has taken the growth of stock markets to new highs besides providing various benefits to investors, brokers, brokerage houses, company and so on.
What is a Demat Account?
The term Demat Account is also popularly known as de-materialised account. The account provides the facility of holding shares and securities in an electronic form. At the time of online trading, shares will be bought and held in the demat account which will help investors to trade easily. A Demat account acts similar to that of a bank account, which benefits the users to hold all kinds of investment in one place be it shares, bonds, mutual funds, government securities, exchange-traded funds and so on.
Demat accounts helps to store the shares or stocks digitally. The format supports high-level authentication, which facilitates its users to ensure the safety of shares from any kind of fraudulence and theft. Investors can keep a track record of the same and the process can be taken ahead with the help of stockbrokers.
Investors can open a demat account with their chosen brokers as per their convenience. The demat account must be registered with NSDL or CDSL. All kinds of book-entry transfer of securities take place under the supervision of Central Depository Services Ltd and National Securities Depository Limited.
The demat account number has to be quoted to all the transactions to enable for electronic settlements of trades to take place. One needs to have access to internet password and transaction password to access the de-materialised account. Users can initiate the purchase or transfer of the securities. Sale or purchase of securities on the de-materialised account will be automatically made once the transactions are completed and confirmed.
Features of Demat Accounts
- Easy Holding: The process of maintaining physical certificates is a tiresome job. Added to it, to monitor their performance is an additional responsibility. Now, demat account holders can breathe easily as holding securities and tracking their investment can be done effortlessly through a single account.
- Reduces Costs: Earlier holding a physical certificate involved several other costs which included handling costs, stamp duty and so on. Currently, all these expenses are waived off in case of Demat accounts.
- Reduces Risk: Holding physical security is prone of risk as it may get damaged or lost or it can be stolen as well. In addition to this, fake securities or bad deliveries will call for uncalled problems. To eliminate the risk factor, it is better to open a demat account as it provides its holders with an option to hold all their investments in an electronic form safely.
- Curtails Time: The use of demat account, eliminates the time consumed by the paperwork as the time required for completing a transaction gets trimmed down imminently. The reduced time requirement helps the account holders to conduct more transactions be it purchase or sale of security holdings within a short period with more efficiency.
- Dealing with odd lots: Previously, the purchase and selling of physical certificates were possible only in specified quantities. The ease of dealing with a single security or odd lots was not available, but now the use of demat account has eliminated the issue of dealing with odd lots.
After understanding the meaning and benefits of having a Demat Account, let's take a look at the 8 Good and Safe Best Demat Accounts to Open in India.
1. Wisdom Capital Demat Account
The Wisdom Capital Advisories Pvt., Ltd started Wisdom Capital Demat Accounts in 2013 as a joint venture between Ashlar Securities and Wisdom Capital formed in 2016. This demat account has paved the way for investors and traders to reap the benefits of improved technology-based tools which offers prompt execution and profit in trading.
Features of Wisdom Capital Demat Account
- Best Technical Analysis chart
- Nil charges for opening demat account
- Lowest brokerage charges
- Demat account maintenance charge is Rs 500 (after 1 year)
- Rated as one of the best mobile trading application
- Prompt, Fast transactions and settlement procedure
- Charges a demat transaction fee of Rs 25.
2. HDFC Securities Demat Account
A subsidiary of HDFC Bank, the HDFC Securities demat account is known for serving a diverse customer base of institutional and retail investors since 2000. It has managed to secure a rating of A1+1, following a decade of experience in trading and empowering the investors to make the right decision and to handle their portfolio.
Features of HDFC Securities Demat Account
- Has a network of around 250+ branches located across India.
- Provides transparent services - The account provides transparent services to its customers by cost-effectively offering high-quality investment services to help them to meet their financial goals.
- Provides timely and relevant information to investors with accurate and unbiased research by a group of extensive research.
- Demat Account opening charges is Nil.
- Charges a demat transaction fee of Rs 25 per transaction.
- Demat account maintenance charges is Rs 750.
3. Angel Broking Demat Account
Offered by Angel Broking Limited, which was previously known as Angel Broking Private Limited, has its presence in more than 1800 cities and towns with more than 110 branches. The company holds the tag of one of the largest independent full-service retail brokerage house in the country in terms of active clients of NSE as on July 31, 2018.
Features of Angel Broking Demat Account
- Demat Account opening charges is Nil.
- Provides fundamental and technical research guidance
- Maintenance charge for demat account is Rs 450 per annum
- Demat transaction fee if Rs 25 per debit transaction
- Provides loans against shares
4. Zerodha Demat Account
Zerodha was the first company to come up with a discount broking model in India and is touted as one of the best online-based discount brokerage houses. The unique feature of Zerodha is it even offers investors and traders inequities to open a demat account on the go using their Aadhaar card.
Features of Zerodha Demat Account
- Provides intraday equity and equity futures at a fee of 0.01% or Rs 20 per trading transaction (whichever is lower)
- Opening Charges for a demat account is Rs 100 (one time charge)
- Get flat Rs 20 charged per executed order for equity options.
- Equity delivery transactions are offered for free both on the BSE and NSE (zero brokerage charges)
- Demat Account Annual Maintenance Charges (AMC) is Rs 300 per annum.
5. ICICI Direct Demat Account
Rolled out by ICICI, the ICICI Direct is one of the top financial service companies which provides a wide range of services which includes stock trading. By opting for 3 in 1 demat account, the client need not open multiple accounts for fund management and trading separately. The unique feature of having a demat account with ICICI Direct is it comes in handy for beginners or new small investors as it takes away the regular ruckus of transfer of funds between trading and bank accounts.
Features of ICICI Direct Demat Account
- Demat Account charges are Rs 100.
- Trading AMC is zero
- Demat account maintenance charge is Rs 500.
6. Sharekhan Demat Account
It is one of the full-service brokers in India which provides online training, financial advisory, seminars to all the investors. The unique feature of having a demat account with Sharekhan is it does not charge any demat account opening fees and any other cost for DP transactions. With more than 500+ branches located in India, it provides the services of a traditional broker with free Call & Trade facility.
Features of Sharekhan Demat Account
- Demat Account Charges is Nil.
- Demat AMC is Rs 450
- Trading Account opening fees for Classic Account is Rs 750 and for Tiger Trade account is Rs 1000 respectively.
- Trading AMC is nil.
7. 5paisa Demat Account
Being a part of India Infoline (IIFL) has its existence for over 5 years now. The 5Paisa.com holds a prominent position as one of the top 10 Demat Accounts in India.
Features of 5paisa Demat Account
- Brokerage Charges for equities, equity options, equity futures is Rs 10 per executed order
- Trading AMC is nil
- Demat AMC is Rs 400 per year
- Trade account opening fees is Rs 650.
8. Upstox Demat Account
Earlier known as RKSV, the Upstox is backed by leading investors and has grown phenomenally to become one of the largest low-cost brokerage houses in India. It currently has thousands of customer base in the country. The opening charges of a demat account with Upstox is Rs 150. It allows investors to trade in mutual funds, F&O, equity, commodity, currency and so on.
Features of Upstox Demat Account
- Trading AMC is zero
- Demat AMC is Rs 150 per annum
- Demat Account Charges is Rs 150
- Equity Delivery Brokerage is nil.
About the Author
Archana is a Content Writer at GoodReturns. She has been writing articles related to investment planning and personal finance for more than two years.