harry (Awaiting ca final results) 09 October 2009
1. What is a demat a/c?
2. How does it work?
3. When his it necessary to obtain?
4. who is eligible to obtain it?
Manmohan ACA, CS (Chartered Accountant ) 09 October 2009
Demat refers to a dematerialised account. Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, you need to open a demat account if you want to buy or sell stocks. So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account.
Manmohan ACA, CS (Chartered Accountant ) 09 October 2009
Is a demat account a must?
Nowadays, practically all trades have to be settled in dematerialised form. Although the market
regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500
shares to be settled in physical form, nobody wants physical shares any more. So a demat
account is a must for trading and investing.
Manmohan ACA, CS (Chartered Accountant ) 09 October 2009
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