What Is Demat Account? Demat Account & Trading Account Explained - Motilal Oswal

Описание: "What is Demat Account? Hello friends in this video I will be talking about a demat account. The rise and fall of stock market excite everyone to enter and start trading in the stock market. The very first step of entering the world of stock market is to open a demat account online. So, what exactly is a demat account and how demat account works? Demat account is a type of account through which the shares of the companies are transacted from one account to another.
Coming to the history of Demat account, before 1997 the shares were held in the physical form. The share certificates were sent to the investors by the companies. After 1997 their share certificates were converted into an electric form and kept in the demat account, so now due to this dematerialization there is no tension of share to be lost, stolen, storing etc.
Now in this video let me talk about demat account in details. Online Demat Account is an account which holds the securities in a dematerialized form. It is just like a bank account which holds securities. One should note that demat account online is different from a trading account. When we go for shopping, we put a certain amount of cash say thousand rupees in a bag before buying a shirt in the shopping mall we see the price of it and tell the shopkeeper that we want to buy that t-shirt, then we take out thousand bucks from the bag and pay it to the shopkeeper which completes the transaction. Similarly, the demat account performs a function of the bag from where we are keeping money and paying for the shirt, whereas when we are giving orders to buy the shirt then we are acting as the trading account.
When it comes to investing in stock markets it is necessary to open demat, trading and baning account. In banking our trader can buy and sell through this account, but before opening these accounts one should know about them and understand the differences between these accounts.
So, what is the trading account? all the trading activities are conducted to our trading account. It acts as a middleman between demat account and bank account. When we buy or sell the share then that amount is transferred from the bank account to the trading account.
Next basis is based on functionality, demat account is used to keep a stock in dematerialized form and trading account is used to buy and sell stocks. Therefore, first we need to deposit the money to a bank account to order. To buy the shares we need to transfer the funds from the bank account to the trading accountant. After purchases the shares from a trading account share is digitally deposited in a demat account.

Now let us discuss the process of opening a demat account, here are the steps to open a demat account. First is identifying and choosing a depository participant. There are two depository participants in India National Securities Depositories Limited or the NSDL and Central Depository Services Limited or CDSL, which are both regulated by SEBI. These depositories holds the securities in the demat form and help in the smooth transaction of the securities from one demat account to the other. Watch the complete video to get detailed information on the Demat Account. Thank You.

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