5 Fun Facts About Demat Account
| |Are you a budding trader and have been planning to open your Demat account? If yes, it’s very likely that you missed out on some of its traits.
Also, know about the Motilal Oswal Demat Account Opening, and Can I Invest In Stock Without PAN Card?
To make the effective use of the account, it is essential to know how to use demat account effectively.
But knowing more requires lengthy reading, isn’t it? Hold that thought as here are 5 lesser-known facts about the Demat account.
1. No Stamp Duty Required for Security Transfer
You can transfer securities with your Demat account instantly. This not only paces the procedure but also reduces paperwork.
2. Loan can be Passed Against the Demat account
Yes, you heard it right! The shares and securities of a Demat account can be held collateral to get a loan. This is known as “Loan Against Shares” where one can pledge his/her Demat account securities to get a loan.
Further, they can choose certain securities or pledge the whole Demat account. The best part – you do not need to sell your securities to get money.
Also, know about Pledge of Shares
3. A Demat Account can be Linked with Multiple Trading Accounts
If you want two accounts – one with a discount broker and another with a full service one, you need not a new trading account.
You can link your existing Demat account with a new broker. If at all your broker denies doing so, consult another broker who offers this facility.
The benefit of linking your Demat account is that you can monitor all your investments/trades in one place.
4. Demat Account Becomes Dormant if not Used Regularly
If you do not use your Demat account for six months straight, it will be frozen. Further, if you wish to resume using it, you will have to get the KYC done again.
Therefore, consider closing your Demat account if you have not been using it actively. This is the best way to avoid AMC for demat account is levied even on frozen accounts.
5. Account Number for Demat Varies for CDSL & NSDL
The Demat account number is 16 digits in the case of CDSL. For example – 7654012789098345. On the other hand, for NSDL, the Demat account number starts with “IN” and is followed by a 14-digit number. For example – IN65904378542303
Besides the facts, there are Demat Account features as well.
To Sum Up
A Demat account is versatile in nature and can hold equity and debt instruments at the same time. Besides, it allows you to sell as many shares you want – even one single share, for that matter.
Moreover, the DPs (Depository Participants) deal with matters such as “address change” and “security transfer”. This not only saves time and effort on the client’s end but also reduces the paperwork.
A Demat account updates automatically, comes at a lower cost, has lesser associated risks and makes share allotment faster. Go ahead and open Demat Account now. Happy Trading!
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