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How to Use A Demat Account

How to Use A Demat Account

Opening your demat account and using it for your trading purposes is just one part of the story. The demat account is actually much broader than that. Apart from the normal benefits of demat account, it is also essential for you to understand how to use demat account. If you have understood what is demat account and how to open demat account, then it’s time for you to follow the below steps to understand multifarious uses of the demat Account.

Basic Usage of Demat Account

  • You can use the demat account to dematerialize and rematerialize your shares. When you are holding physical certificates then you can convert the shares into demat by giving a demat request form (DRF) to your DP. If you have bought shares in physical form and you want to transfer the shares into your name and also dematerialize it then you can use a Transfer cum demat (TCD) format. Similarly, you can also convert demat shares into physical shares by using re-materialization form.
  • You can actually nominate someone as the beneficiary of your demat account. Actually, it is always advisable to appoint someone as the nominee of your demat account as the identification of beneficiary and transmission becomes automatic in that case.
  • Your demat account can be used for its most fundamental purpose; that is buying and selling shares in the stock market. When you buy the shares they are automatically credited to your demat account and when you sell the shares they are debited to your demat account.
  • Demat account can be used to keep a tab and monitor your consolidated portfolio. The demat can hold your equities, mutual funds, gold bonds, index ETFs, gold ETFs, institutional bonds etc. Thus you can get a consolidated view of all your investments in one place. In fact, your demat account with all the holdings can be directly mapped to your online portfolio in the brokerportfolio. This can also give a real time view of your net worth.
  • Demat account also acts as a central repository for all your corporate actions. Your stock splits and bonus issues are automatically credited into your demat account if your name is there on the record date. There is no additional effort required from your side. Even dividends of companies in your demat account as on the record date are automatically credited to your bank account if the bank IFSC mandate is provided.
  • The demat account can also be a veritable platform for you to get allotment of IPO shares. When you apply for IPOs, you are required to mention your demat account details and the shares are automatically credited to the extent of allotment.
  • The demat account offers a central platform for the investor to handle all his communications with companies at a single place. Whether you want to change your signature, your address or your contact details or bank mandate; the demat account will take care of all that. No separate communication is required with all the companies individually.
  • You can also authorize another person to operate the demat account on your behalf by giving them the power of attorney. This is a stamped document that is executed and which permits the beneficiary of the POA agreement to buy and sell shares on your behalf. This is useful in case you are going abroad and require the transactions to happen as per your instruction in your demat account.
  • The demat account can also be used as a platform for transfer and transmission of shares. For example, if you are holding shares in 3 or 4 demat accounts then you can consolidate your holdings in a single demat account. This can be done through off-market transfers and it does not attract any capital gains implications in this case. There is also something called as transmission of shares in the event of death of the demat account holder.
  • You can also use your demat account to hold your open-ended mutual funds by filling up a conversion request form (CRF). The mutual fund units will be transferred into your demat account after they are verified by the RTA of the fund. Alternatively, you can buy these units on the BSE MF platform which directly go into your demat account.


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"Prevent Unauthorized transactions in your Trading/Demat Account --> Update your mobile numbers/email IDs with your stock brokers/Depository Participant. Receive alerts/information of your transaction/all debit and other important transactions in your Trading/ Demat Account directly from Exchange/CDSL at the end of the day .......... Issued in the interest of investors." | "KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary." | "No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account." |"Investment in Securities Market/Commodity Market is subject to Market Risk. | RGESS investors kindly download New Retail Investor Certificate from link - | Dear Investor kindly update Aadhar Number with your demat account, contact your nearest branch."
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