5 Important Things To Check Before Opening A Demat Account

Hey, are you satisfied with your life? Well, there are only 0.1 % chances that someone is really satisfied with what he gets. There is always a greed to fulfill, there is always anxiety about what’s happening in your life? But, how do you relax such anxieties? Well, there are a lot of ways of doing so but, if we go as per the trend, motivational quotes and motivational videos are the best. But, of whom? Well, outside India the one name that strikes the mind of people is Warren Buffet, but that’s not the case with India. Do you know who is he?

In India, only a small section of people know this investment giant, Warren Buffet. The reason is that India has not been that much developed into the field of investments and trading as it has been into other professions. Only a number of people are financially literate in India and only that’s a reason why a puny of Indian population make investments decision properly and wishes to invest their hard-earned into the stock market.

Practically speaking, the situation in Indian has been so bad that a large number of people are not even aware of the basics. They may know that what is the Demat account, but do not have technical information about it. Like, what are the dos and don’t of a Demat account and especially, what thing to check before opening a Demat account. Well, in this article we are going to see this only. What are the 5 important things to check before opening a Demat account? Let’s begin!

1. Types of the broker

Firstly, you require to choose a stock broker through whom you will carry out your transactions, which means buying and selling of the shares. This is the most basic and fundamental duty of the investor who is willing to play the game in the stock market and is soon opening a Demat account.

A brokerage corporation can be of two types, it is either a discount broker or a full-service broker.

The difference between the two is the extent of services and products they offer to their customers. A discount broker enables you to trade in stocks and futures & options, whereas, on the other hand, a full-service broker in addition to these services also gives an option to invest in personal finance products such as mutual funds as well as initial public offerings (IPOs).

2. Fees and Charges

The Fees and broking charges of a brokerage house should play an important role while choosing a broker offering a Demat account to you. While some may waive off account opening charges in the beginning, it is crucial to be aware of the transaction charges that differ widely from broker to broker. Besides this, there are some brokers may charge different fees for different trading segments that prevail in the stock market.

Most brokers offer a wide variety of different pricing plans to suit the need of every investor out there. The most popular among them is the flat pricing plan. Here is also another option of the volume-linked pricing where the brokerage goes down and falls as the volume of trade goes up and increases and the pre-paid pricing in which the brokerage takes an upfront payment from the customer is out there and offers discounted rates at a later date on broking transactions.

3. Online access and the software

One another significant factor to look out for and consider for sure before you open a Demat account is the software of the trading that the broker provides alto you and whether or not it is user-friendly and smooth. Unnecessarily complicated and a confusion creating software will make trading difficult and tardy for you. You must always choose a broker that offers simple software and user interface to make investing easy, simple, and user friendly, taking less time.

4. Nomination

In case of your sudden demise, all the investments that you own, all your shares, and stocks are transferred automatically to a nominee that you identify at the time of opening your Demat account with your broker. Give careful thought to this point as it is very crucial and directly related to the financial goals that you have set for your family. The person you nominate should be aware of your investments and in sync with these goals and carry forward your investments to meet and fulfill such goals. Therefore this point is of the utmost importance.

5. Support

Though everyone is tech-savvy and despite the advanced use of technology, things may go awry once in a while, while you are making a transaction. In such a case, you require support from an easily available back-end team who will get on the phone with you easily and would also resolve these issues for you speedily. Therefore you should or ought to check with the broker about the back-end support before you make any crucial judgment.

Wrapping up

While wrapping up this whole article, we could say that people are aware of the Demat account, how they work? What is the process of opening the Demat account? And so on, but, they do not possess critical information of the key things to keep in mind while opening the demands.

A search of the shares, analysis of the market, etc, are the secondary that comes as crucial one while investing in the stock market. But, selecting your broker house wisely is the first and the foremost thing you should consider while stepping into the stock market. As mentioned above, type of the broker, brokerage, combination, software, and support system are the key things that help you decide the right broker house.

There are a large number of stockbrokers present out there in India, what you have to do is just do proper research of the stockbrokers by making the above-mentioned points as the benchmarks and select wisely the broke that suits you and your budget.

Happy ( And smart ) investing!!

Content Courtesy: Kalptaru Agarwal