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Informative Report Of Demat Account


The word ‘Demat’ is the colloquial short word for ‘Dematerialized account’ which is a type of an account where shares and securities are held electronically to enable trading transaction & settlements in a stock exchange, thereby eliminating the need of a physical financial instrument. Informative Report Of Demat Account will be given in this project

It was in the year 1996 when it was first introduced in India after the introduction of the depository system by the Depository Act of 1996. It is mandatory for one to own a demat account with an investment broker linked to a savings or other funded account if he/she wants to participate in the stock market trading.

The interested candidate needs to approach a Depository Participant (DP)  which acts as intermediaries between the trader/investor and the depository. A DP will be registered with the Central Depository Services Ltd. (CDSL) and the National Securities Depository Ltd. (NSDL) of the country.

The DPs are basically the stockbroking firm, bank or sub-broker etc, with whom one needs to get registered, which needs some identity proofs and other documents for verification and on its completion provides the trader with login credentials and transaction passwords upon whose confirmation the transfers or purchases of shares can then be initiated.

One can operate the transaction of buying/selling of shares by own or through broker personally or online from their demat account. The broker then provides the candidate with transaction password to carry out the share trading processes. It is possible for a person to hold more than one demat accounts.

Share trading using demat account involves inward and outward brokerage, which varies from broker to broker and on trading style whether intraday or delivery.


The project aims to learn about Demat account and its features

Objectives of the study are

  1. To learn about Demat account
  2. To learn about buying and selling through Demat account
  3. To learn about functions of Demat account
  4. To learn about the uses of Demat account
  5. To learn about the varieties of Demat account
  6. How to open a demat account
  7. What are the requirements to open a demat account


In this project, we are going to learn about different types of winding up of a partnership firm

Primary data is data gathered for the first time by the researcher. It is the raw form of data and thoroughly studied and hence a helpful tool for secondary data. Here the method used for collection of primary data is by using reference of the website.

The referred websites in this project are used as a source of data for this project. Most of the content is collected from these websites. The authenticity of this information cannot be taken seriously and thus keeping that in mind most of that data might be true of fake.


What is demat account?

The dematerialized account number is quoted for all transactions to enable electronic settlements of trades to take place. Every shareholder will have a Dematerialized account for the purpose of transacting

Access to the Dematerialized account requires an internet password and a transaction password. Transfers or purchases of securities can then be initiated. Purchases and sales of securities on the Dematerialized account are automatically made once transactions are confirmed and completed.

Benefits of Demat Account

  • Easy and convenient way to hold securities
  • Immediate transfer of securities
  • No stamp duty on transfer of securities
  • Safer than paper-shares (earlier risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc. are mostly eliminated)
  • Reduced paperwork for transfer of securities
  • Reduced transaction cost
  • No “odd lot” problem: even one share can be sold


How to open a Demat Account

Step 1: To open a demat account, you have to approach a depository participant (DP), an agent of the depository, and fill up an account opening form. The list of DPs is available on the websites of depositories: CDSL (Central Depository Services (India) Ltd and NSDL (National Securities Depository Ltd).


Step 2: Along with the account opening form, you must enclose photocopies of some documents for proof of identity and proof of address.


Step 3: You will have to sign an agreement with DP in the depository prescribed standard format, which gives details of rights and duties of investor and DP. You are entitled to receive a copy of the agreement and schedule of charges for future reference.


Step 4: The DP will then open an account and give you the demat account number. This is also called beneficial owner identification number (BOID). All your purchases/investments in securities will be credited to this account. If you sell your securities, your demat account will be debited.


  1. https://businessjargons.com/demat-account.html
  2. https://en.wikipedia.org/wiki/Demat_account#Benefits_of_Demat_System
  3. https://www.kotaksecurities.com/ksweb/Research/Investment-Knowledge-Bank/what-is-demat-account
  4. https://www.kotaksecurities.com/ksweb/Research/Investment-Knowledge-Bank/difference-between-trading-account-and-demat-account
  5. https://www.quora.com/Is-the-Demat-account-necessary-for-doing-an-online-trading

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