Key Takeaways

• HDFC Bank Demat account has a free first-year Annual Maintenance Charge (AMC) and a 4× margin trading limit. 

• State Bank of India offers a “3-in-1” setup (Savings Bank + Demat + Online Trading) with an annual AMC of about ₹400 and an account opening fee of ₹0. 

• Zerodha Broking Ltd. offers free account opening and zero brokerage for equity delivery trades, which substantially lowers costs for long-term investors. 

What is a Demat Account?

“A Demat account is now as essential as a bank account for anyone who wants to grow their money.”

India is seeing a significant shift toward digital holdings. A Demat account stores shares, bonds, and other securities electronically, which functions similarly to a digital locker. 

A demat account works like a secure digital vault for your stocks and bonds. It keeps all your securities in electronic form, so you no longer have to worry about physical certificates. 

My Demat account is credited with the shares I purchase through my broker. They are deducted from it when I sell. Investment products are hence safely stored in the Demat account. This method is far more practical and safe compared to keeping physical certificates.

What is the use of a Demat Account?

No bro, you cannot receive or send money through a demat account. This section explains the use of a demat account.

A Demat account keeps everything organised and simplifies the entire investment process. Demat accounts benefit customers due to:

1. Easy buying and selling of shares

Buying and selling shares is made simple because shares automatically enter or exit the Demat account after a trade is completed through a trading account.

2. Safety From Physical Certificate Issues

It reduces the possibility of misplacing, damaging, or losing physical share certificates.

3. Convenient Online Access

Investors can view holdings, transactions, and statements online at any time. State Bank of India offers online access to billing, transaction, and holding statements.

4. One Place for All Types of Securities

It enables investors to hold various securities in one location, including bonds, shares, mutual funds, and exchange-traded funds.

All investments are kept securely and easily accessible in a Demat account, which functions as a safe digital locker.

What is Demat Account and Trading Account?

People often confuse a trading account with a Demat account. 

The platform I use to place orders to buy or sell securities is called a trading account. My securities are stored in a Demat account after they are purchased.

I use my trading account to place a buy order. The shares are credited to my Demat account after they are executed. As a result, both accounts are complementary. 

One is for storage (Demat), and the other is for action (trading). I can't easily start buying or selling if I have a Demat account but no trading account. I can purchase shares if I have a trading account but no Demat account, but I can't hold them electronically.

What is a Demat Account in SBI?

SBI offers Demat accounts for investors who desire banking, trading, and Demat services integrated into a single ecosystem.

The SBI Demat account is perfect for clients who want all services combined into a single, reliable banking platform.

What is a Demat Account in HDFC?

HDFC Bank's Demat account is meant for investors who want a full-service, safe, and expertly managed investing environment.

HDFC Bank's Demat account is a good choice for investors seeking a variety of investment options and strong banking support.

What is a Demat Account in Zerodha?

A Zerodha Demat account is ideal for investors who prioritise digital technology and are economical, and seek an easy, quick, and affordable way to make online investments.

Zerodha is a great option for beginners and experienced investors seeking an easy-to-use and affordable investing platform.

Bonus Tip: Do you know? Your Demat account can also hold NCDs along with shares and mutual funds. This lets you manage all your investments in one secure place, just as HDFC Bank explains on its official site.

Conclusion 

Your digital locker for securities is a Demat account. It functions in combination with a trading account. No matter if you go with SBI for its easy setup, HDFC for its strong services, or Zerodha for its low costs, a Demat Account acts as your digital vault. It makes investing simpler, safer, and more organised.

FAQs on Demat Account 

What is the demat account number?

A Demat account number is a unique 16-digit identification number assigned to your Demat account. It helps depositories and brokers recognise your account and securely credit or debit your securities.

Why does one need a demat account?

A Demat account is needed to hold shares and other securities in digital form. It keeps investments safe, makes buying and selling easier, and allows investors to track their portfolio online without any physical paperwork.

Which Demat account is best?
 

The best Demat account is the one that offers low charges, reliable support, and easy online access. Many investors prefer options from trusted banks like HDFC Bank and SBI or low-cost brokers like Zerodha, depending on their needs and trading style.

What is a Demat account and what is the use of it?

 A Demat account is a digital account that stores shares and other securities electronically. It is used to hold investments safely, make buying and selling easier, and track holdings, transactions, and statements online in a secure and organised way.

How to open a basic service demat account at Zerodha?

To open a Basic Service Demat Account (BSDA) with Zerodha, visit signup.zerodha.com or use the Kite app. Start by entering your mobile number and email. You’ll need your PAN, Aadhaar linked to your mobile, and bank details like a cancelled cheque or statement. Next, complete a quick In-Person Verification (IPV) using your webcam. This account suits small portfolios and requires fewer documents and lower charges. The main advantage is that Annual Maintenance Charges (AMC) are capped for holdings up to ₹2 Lakhs..
 

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About the Author

LoansJagat Team

‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.