Factors To Consider Before Opening A Demat Account

A demat account is one of the most important requirements for making financial investments. A demat account is an electronic repository of your financial investments. Since almost all financial instruments are electronic these days, the account in which they get credited is called the demat account. In case any instruments are sold, they’re debited from the best demat account.

To put it simply, a demat account is like a bank account. You can see the transactions that you’ve made in this account, you can also see the debits and credits to this account. If any share is partly paid, you can also see that.

If you want to trade or invest in the stock market then the first step is to open a demat account. But before you open a demat account, you need to think of a few factors.

Here are factors to consider before opening a demat account:

Does the broker offer a trading account:

Most brokers act as depository participants for you to open your demat account. However, to make trades, you need a trading account. You must check whether the broker or depository participant offers a trading account as well. You don’t need to open the demat account and trading account with the same company. For example, you can open your demat account with your bank and a trading account with a broker. But in case you opt for this, you will need to fill delivery instruction slips that transfer the financial instrument to the broker’s trading account when you make trades.

Online trading portal:

In case you prefer to open demat account and trading account with the same organisation, you need to find out whether they give you an online trading portal to make your trades. Some brokers may have a mock trading portal which means you can try out the trading portal before you open the account. Be sure to choose a portal which is easy to use and gives you the flexibility to make the orders you want.

Charges and costs:

One of the most important things to consider before you open a demat account are the charges and costs. There are different charges that a depository participant charges for a demat account. You have annual maintenance charges, charges on sale of investments, dematerialisation request charges, re-materialisation charges, reconversion of mutual fund units, account statement charges, Delivery Instruction Slip (DIS) booklet charges etc. These charges differ from DP to DP and you need to look at these before you open demat account.

Performance and review of the broker/DP:

The best demat account is the one where the broker or DP does not have any service complaints against them. It is also worthwhile asking existing customers for their reviews about the broker or DP’s services. This can help you find out the services that the DP provides to existing clients and whether the existing clients are happy.


Support refers to a lot of different things. The best demat account is the one where the broker or DP makes available a range of research reports related to the market and the portfolio. It must be easy for you to access the demat account and check the balance at any point in time. The other thing to note is how quickly transactions get executed. The broker or DP needs to have a robust system to get your trades executed and if you have a separate trading account the DP must transfer shares using your DIS quickly.

If you’re looking to open your demat account and start investing you can get in touch with a reputed stock broker like IndiaNivesh.

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