Many people have talked about saving accounts with banks and how they allow quick access to your money with security from theft and mistreatment to their kids, friends, co-workers, and even household helpers. Malti's investments in shares, government securities, exchange-traded funds, bonds, and mutual funds are protected from fraud thanks to Kavita's proactive assistance this year when she showed her how to open a Demat account.
Malti was really proud of the fact that she had helped all her domestic helps to open bank accounts. She was sharing with her friend and neighbour, Kavita, “I actually transfer their salaries to their bank accounts at the beginning of every month. It is so convenient for me. It’s good for them too, since they have got into the habit of transacting digitally and are actually using banking facilities.”
“That’s really great!” remarked Kavita. “Now it’s time for you to help them to open demat accounts.”
“They don’t need demat accounts; they don’t invest in the stock market,” replied Malti. “And even if they wanted to open demat accounts, I am not in a position to help them. I myself do not have a demat account since I do not invest or trade in equity. I prefer to invest in mutual funds and fixed deposits.”
This came as a surprise to Kavita. She was aware that it is not mandatory to hold a demat account to buy and sell mutual funds although it is a prerequisite for buying, selling and even holding shares. However, she knew that demat account can be used for holding mutual funds and various other types of financial securities like bonds, mutual funds, etc., in the electronic form.
“But Malti, you can keep not only stocks but even mutual funds, bonds including Sovereign Gold Bonds (SGB), debt instruments and other securities in a demat account. Using a demat account for transacting in these financial instruments is more convenient, faster, safer and it eliminates unnecessary paperwork,” she said.
Kavita explained to Malti that as Indians get more digital-savvy, with the spread of internet connectivity and access to smart phones, the need for demat accounts will rise considerably. Going forward, having a demat account may eventually become a prerequisite for investors who want to purchase or subscribe to any financial instrument, whether it is stocks or mutual funds or debt products.
She also mentioned to Malti that investors can view a consolidated statement of all their holding in a demat account online at https://eservices.nsdl.com. “As far back as 2004, NSDL had launched a facility called IDeAS for all their clients. IDeAS, which is an abbreviation of ‘Internet-based Demat Account Statement’ is a facility for viewing balances and transactions in your demat account. So, you can stay really well informed about the status of your portfolio of holdings in your demat account, very effortlessly. You can view and download NSDL CAS and access more value-added services like e-Voting, Download of Form 26AS at NSDL’s IDeAS facility”.
“That sounds very convenient. But getting a demat account must be such a hassle…” Malti said, thinking aloud.
“Not at all!” assured Kavita. Opening a demat account with a Depository Participant (DP) of NSDL is very quick and completely hassle free. All you have to do is click the NSDL link https://tinyurl.com/NSDLDematAccount and choose the DP of your choice and open NSDL demat account quickly.
While opening an account online, to make the journey more seamless, an investor should ideally be required to keep few essential documents handy so that the details are entered easily on screen when asked for viz., Aadhaar Card in case Aadhaar details are fetched from digilocker, PAN card for verifying the PAN details bank details during penny drop to verify the bank details, etc.
The entire online account opening process takes barely 10 minutes - right from the time the investor inputs all their details and submits all their proof online and finally the Aadhaar based eSign at the end of the journey.
“Sounds simple enough,” said Malti, who was now keen to open her demat account as soon as she returned home. “Once I have my own demat account, I will help my domestic helps to open their accounts as well, so that they are financially future-ready.”
If you do not have a demat account, it’s time to get carried forward on this next wave of financial inclusion. Just simply click here to open NSDL demat account online https://tinyurl.com/NSDLDematAccount
This article is written by Mr. Prashant Vagal, Executive Vice President, NSDL (Photograph)
