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Demat Account | Motilal Oswal

Have you ever thought of investing in the stock market? If yes, you must also be aware of the requirements to invest money in the stock exchange. One of the most important and mandatory requirements for investors is to have a trading account and a Demat account. Even a number of novice traders have a lot of confusion about Demat accounts and trading accounts. Trading and Demat accounts may confuse you as they are typically linked accounts.

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Demat Account | Motilal Oswal

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  1. DematAccount About Demat Account How does a Demat Account work?

  2. About Demat Account • The option of storing shares and other securities electronically is provided by a demat account, commonly referred to as a dematerialized account. When trading shares online, shares are acquired and kept in a Demat Account, making transactions simple for customers. A demat account houses all of a person's investments in bonds, mutual funds, exchange-traded funds, shares, and government securities. • The Indian Stock Exchange was able to go digital thanks to Demat, which also enhanced SEBI monitoring. Additionally, the Demat account reduced the risk of theft, destruction, and fraud by storing stocks in electronic format. It was originally made accessible by NSE in 1996. Initially, opening an account required a manual procedure, and it took a few days before it became active. A Demat account can now be opened online in just five minutes. Demat's popularity increased as a result of the end-to-end digital approach after it grew significantly during the pandemic.

  3. How does a Demat Account work? • The process of trading with a Demat account is comparable to trading physically, with the exception that a Demat account is electronic. You place an order through your online trading account to start trading. It is required to link both trading and demat accounts for this reason. The exchange will handle the order after it has been placed. Before the order is processed completely, the demat account details, share availability, and market price are checked. Shares are subsequently reported in your statement of holdings after the processing is finished. A delivery instruction note containing stock information must be submitted when a shareholder wants to sell shares. The comparable cash value is subsequently credited to the trading account and shares are deducted from the account.

  4. Thank You

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