Pro Tips to Manage Demat Account Online

New Delhi: Without a demat account, you cannot invest in the stock market in India. The Securities Exchange Board of India has introduced a mandatory requirement for using an online deposit account to purchase and sell securities. It does not suffice to know how to open a Demat account. Also, you should see the way your funds are operated and managed. Below is a guide to help you manage your Demat account online. 

Understanding Demat Account

Demat accounts are used to hold shares and securities in electronic form. Shares shall be bought and stored in a Demat account online to facilitate more straightforward user trade. A Demat account is where all investments made by an individual in traded shares, government securities, exchange-traded funds, bonds, and mutual funds are stored.

Demat has facilitated the digitization of the Indian stock market and brought better governance to SEBI. Moreover, by storing securities electronically, the Demat account has reduced the risk of storage, theft, damage, and negligence. The system was first introduced by the National Securities Exchange in 1996. It was initially a manual process to open an account, and it took investors several days to get it up and running. In five minutes, you can set up a Demat account online. Demat has become increasingly popular due to the end-to-end digital process, and its use has increased significantly. Investors can open a Demat account with any broker of their choice.

Two other accounts, your bank account and your trading account, complement the work of the Demat account. In other cases, the role of your Demat account shall be limited to ownership of shares, stocks, bonds, mutual funds, equity investments, etc. The account is debited or credited every time you buy or sell stocks. The primary account of a day trader is most commonly referred to as a trading account.

Pro Tips to Manage Demat Account Online

You have two different ways to handle your online demat account right now. 

1. By using your stockbroker's trading platform 

As you can see above, several stockbroking platforms offer demat account management services. You only need to log on to the trading platform of your stockbroker using your user name and navigate to your demat account section. You can continue to perform several tasks, e.g., transfer shares from your demat into another account, view an account statement, download contract notes for each transaction carried out on the stock markets, etc.

2. Using a separate web platform developed by the depository.

The same can also be done on the web platform of the depository itself concerning tasks such as this and more. You will also receive user credentials to use when setting up your demat accounts with a stockbroker so that you can start using them. You need to go to the depository website of CDSL and NSDL, with whom you have a demat account, and enter your login credentials. You can perform any of the above tasks, like freezing your Demat account temporarily, once you have logged on to an account.

3. Verify that passwords are properly secured at all times

It's no brainer to have a strong password. The two factor password protection feature, which is also added to security, currently exists in almost all of the accounts. But always think of the frauds as being one step ahead, so keep very strong passwords. It is advisable and recommended that you change your password regularly. A fundamental part of your demat account security checks is also to keep an eye on SMS messages and phone SIM protection.

4. Avoid using the account unnecessarily for a longer period 

It is advisable to ask for an account freeze if you will not be using or monitoring the Demat account for a long time. This means you cannot use any funds from your account for buying or selling, and even the sell' option is blocked. The option of freezing also guarantees that all corporate actions on the shares in question will be beneficial to you. 

5. Keep a close eye on your Demat account

If you are considered an investor with a long horizon, it is recommended that at least two monthly checks be made on the demat account. In order to ensure security and prevent misuse, it is only necessary to take a look at investments and past transactions.

Once you've learned about demat account management, make use of it. On the other hand, don't be afraid if you don't already have one. Get in touch with BlinkX's online trading app immediately. You can open an Internet demat account for free in a few minutes.