Choose the Best Demat Account for Your Market Trading
Market trading is a huge investment that has high risks. And yet, the amount of money you can make is practically limitless. This fact attracts the traders, both seasoned and fresh ones, to try to make their fortune through accurate market predictions.
Begin by opening a demat account
To begin trading, you must open a demat account. This is the verification of your identity and the genuineness of your intent to trade on the market. You can open a demat account with many kinds of trading houses. Best demat account is one that gives you the best trading options without taking too much of your money in the form of fees and commissions. The amount of fees that one must pay when opening the demat account can be summarised as the following:
1. Account maintenance charges
2. Account opening charges
3. Brokerage charges
Of course, there are those who do not charge a fee for account opening. This is not a deal breaker anyway as the amount involved is minimal. The conveniences offered to the users of the demat account include the trading platform and customer support services. Some brokerage houses offer advice daily based on the market situation. It is wise to consider all the conditions before one chooses the proper broker to host his or her trading account.
Types of brokers
The most popular broker is the full-service broker. He will offer all the amenities needed for trading including a trading platform and a trading account. This person will usually take a percentage on all the transactions as per the amount that is traded. So, if you trade a huge amount, you must pay a huge percent of this as brokerage. This is a costlier option compared to the other one.
This is the discount broker who will not give full service. He will just offer the bare essentials and then charge you only a flat fee. This means you do not have to pay the broker a percentage but rather a fee of Rs 50 per transaction. This is much lower than the Rs 400 or more that the full-service broker charges. So, newbies and traders who do not do much trade on the market opt for the discount trader.
Electronic holding in demat account
When you say demat account, it means the stock and securities are placed there in electronic form rather than in the physical form. So, demat means dematerialized form of keeping the stocks and commodities. In India, you have only two depositories that offer demat accounts –Central Depository Services (I) Limited (CDSL) and the National Securities Depositories Limited (NSDL). These are approved by SEBI. When you appoint a broker to hold your stock, they cannot do so on their own. They have to employ one of the two depositories and operate through the demat account.
You must have a reliable and safe trading platform to conduct trades. This is provided to you by the brokers who opens the demat account for you. If they provide good customer support and reports on the market conditions, you will do better trade. Check whether your trading house has enough back-office features such as Portfolio, Dashboard, Reports, Referrals, Funds, and Profile.