Originally, stocks and shares used to be traded through certificates called physical receipts. This led, however, to extensive paperwork and took a lot of time. The phase of dematerialisation of shares was introduced in 1996 to address this and to take advantage of an electronic trading network that was gaining momentum in the West and Asian markets. Physical share certificates were converted into securities of an equal number and price in electronic form and were credited to the Demat account of the investor. The emergence of trade, therefore, began this way.

Demat accounts enable the investor to easily buy and sell and trade not only securities and stocks but other goods without the need for some kind of paperwork but in a much more simplistic approach.

There is no single market secret to discover, no single correct way to trade the markets. Those seeking the one true answer to the markets haven’t even gotten as far as asking the right question, let alone getting the right answer.

Jack Schwager – Author of Market Wizards

Why you need to open a Demat account?

Today, such accounts are of vital importance because the entire financial expenditure, trading and maintenance network has been digitised. Demat accounts are therefore the necessity of the day to enable the user to have a seamless and straightforward experience. Such accounts are important for trading on stock exchanges in India. While SEBI-Securities India's and Exchange Board has allowed up to 500 shares to be exchanged in physical form, it is not a preferred option these days as it causes unnecessary maintenance and monitoring inconvenience.

This account holds financial instrument certificates, such as shares, bonds, government securities, etc. The dematerialisation account thus enables the investor to systematically retain their savings as well as makes a quick movement to purchase and sell whatever goods they want. A Demat account is more than just a securities-holding account. It brings clarity and better regulation to the industry by digitisation.

Investing in physical securities, along with a long process and a high chance of obtaining fake shares, is a great deal of paperwork. An investor should opt to open a Demat account in order to keep this whole process quick and streamlined. Online trading allows shares and securities to be held in the dematerialized or electronic format of such an account. Dematerialisation is the mechanism by which physical share certificates are transformed into an electronic form to improve their accessibility.

Functions of Demat account

All your shares and investments, such as equity, bonds, mutual funds, government securities, ETFs, are kept in your Demat account either in electronic or demat format. The mechanism and the bodies involved in the operation of such an account must be known. The key roles of the Demat account are below:

  • Depository: Two depositors are currently registered with SEBI I CDSL-Central Securities Depository Ltd. (ii) NSDL-National Securities Depository Ltd. The Demat account is kept by these depositories on your behalf. The activity is equivalent to that of a bank.
  • Depository Participant(s)(DP): is a depository agent by which the investor interacts. Financial institutions, scheduled commercial banks, foreign banks with RBI-Reserve Bank of India approved operations in India, stock brokers, clearing companies or houses, state financial corporations, NBFCs, share transfer agents, etc., may be registered as a DP in accordance with the conditions proposed by SEBI.
  • Unique ID: Every single Demat account has a unique identification number for verification. This is used during transactions to help businesses recognize and credit the securities in the account of the individual investor. It is a unique number of 16 digits, the DP id is the first eight digits, and the last 8 are the Client Id ( investor account).

Facilities offered by a Demat account

  • Transfer of investments: The demat account facilitates the transfer of an investor's shares. It makes an effortless transfer of shares by filling in a Distribution Instruction Slip (DIS) with all the necessary investor specifics. It is however, not only limited to shares, but it is also possible to transfer different assets or securities holdings into such an account.
  • Dematerialization and Rematerialization: A demat account makes it simple to transform securities into various formats. To carry out the formalities for transforming the physical share certificate into an electronic form by instructing your DP-depository participant for dematerialisation.
  • Loan Facility: securities held in the account can provide an accurate and comprehensive holding to the investor in order to allow the investor to apply for a loan from a bank or financial institution. The securities can be supplied to the loan as collateral.
  • Corporate actions: These accounts assist the investor in monitoring his shares and managing them. This is clearly required to monitor the split for their shareholders of any equity shares, incentive issues or any other steps taken by the companies.
  • Demat account freezing: Investors are given the option to freeze your account for a particular period of time or as needed. This is often done to stop unexpected operations in the account. However, a certain number of shares in the investor's account should be present in order to use this service.
  • Speed E- facility: NSDL has provided its investors with an electronic facility to complete a transaction by sending an e-slip which is then sent to their DP.

How to open a demat account online with Invvex


Step 01

Fill the lead form from Angel Broking to Open Demat Account


Step 02

Enter OTP received on the registered Mobile Number


Step 03

Fill Date of Birth, PAN details, Email Address and Bank Account Details.


Step 04

Details of your demat account are sent to you on your registered mail address.

Additional benefits you can enjoy with a Demat account

  • Consolidation: Separate portfolios of the same business may be combined to create a new portfolio. You should forward the physical certificates to the company's RSTA with a letter properly signed requesting consolidation.
  • Dematerialization and Rematerialization: A demat account makes it simple to transform securities into various formats. To carry out the formalities for transforming the physical share certificate into an electronic form by instructing your DP-depository participant for dematerialisation.
  • Account freezing: For a certain time, there is a function that allows you to freeze your account, any protection and even any number of securities. To avoid any unauthorized activity on your account, you can do it.
  • Account types: Demat accounts, much like a bank account, can take various forms. You may open a joint Demat account, or several accounts in the name of a company, or even a minor's name. The Demat account of a minor, however would require a guardian to manage the account.