5 Things to Know Before You Start Investing via Your Demat Account
In today’s digital age, if you want to invest in the stock market, then having a Demat account is a must. This is an account in which your investments like shares, bonds, mutual funds are stored in electronic form. It is just like money is stored in a bank account.
Earlier people used to keep physical share certificates, but now everything is online and paperless. With a Demat account, you can easily buy and sell stocks, without any paperwork.
🔹How does a Demat account work?
When you buy shares of a company, those shares get transferred to your Demat account. When you sell shares, those shares are withdrawn from your Demat and the money comes into your linked bank account.
This entire process happens through the Depository. There are two major depositories in India: NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).
You cannot open an account directly with these depositories. For that you need a Depository
Participant (DP) like banks, brokers (Zerodha, Groww, Upstox, etc.)
🔎 In short:
You buy/sell from the Trading Account, and your shares remain safe in the Demat Account.
🔹Know the Charges Involved
Demat account is not free. It has many types of charges which can affect your returns:
Charge Type | Explanation |
Account Opening Fee | Some brokers give this for free, some charge |
AMC (Annual Maintenance) | A fixed amount is charged every year to maintain the account |
Transaction Fee | Whenever you buy/sell shares, a small fee is charged |
Custodian Charges | Extra charges are also levied for holding some securities |
📊 In the above table you can see how the charges of different brokers vary.
🔹Choose the Right Broker
✅Choose a SEBI registered broker – Brokers must be registered with SEBI.You can verify their SEBI registration number on the official website of SEBI.
📉 Compare Brokerage Charges- Every broker has different charges: Like – Account opening fees, AMC (Annual Maintenance Charges), Intraday / Delivery brokerage, Hidden charges like DP charges, call & trade fees . Discount brokers like Zerodha, Upstox offer less or zero brokerage.
💻Check how is the trading Platform – A good broker offers a powerful and easy-to-use app or desktop platform. Fast order execution, Live charts, indicators, Mobile + Web access, Technical analysis tools should be present.
📈 Research & Tools Available or not – Some brokers provide free tools like – Stock screener, IPO alerts,Portfolio analysis,Research reports, etc.
🔐 The broker should be trustworthy & secure – The broker’s reputation should be strong, and the
website/app should be secure. There should also be transparency – all charges should be clearly mentioned.
🛠 Check the customer support feedback – Check the customer feedback.
⭐ Check Public Reviews & Ratings- What people are saying about the broker on Google reviews, Quora, YouTube – definitely check. Established brokers like Zerodha, Angel One, ICICI Direct, Groww are usually trusted.
Feature | Zerodha | Upstox | Angel One | Groww | ICICI Direct |
Broker Type | Discount | Discount | Full-service (low cost) | Discount | Full-service |
SEBI Registered | Yes | Yes | Yes | Yes | Yes |
Account Opening Fee | ₹ 200 | ₹ 0 | ₹ 0 | ₹ 0 | ₹0 (with 3-in-1 A/C) |
AMC (Annual Fee) | ₹ 300 | ₹ 300 | ₹ 240 | ₹ 0 | ₹700+ |
Delivery Charges | ₹ 0 | ₹ 0 | ₹ 0 | ₹ 0 | 0.55% (high) |
Intraday Charges | ₹20 per order or 0.03% | ₹20 per order | ₹20 per order | ₹20 per order | 0.03%-0.05% |
Mobile App | Kite | Upstox Pro | Angel One App | Groww App | ICICI Direct App |
Research Reports | No | No | Yes | Basic Only | Yes (detailed) |
Mutual Funds | Direct MF | Direct MF | MF with ratings | MF Focused | Available |
IPO Investment | Easy | Easy | Easy | Super Easy | Easy |
Margin Facility | Limited | Limited | Available | Not Available | Available |
Best For | Low-cost Traders | Beginners + Low-cost | All-in-one Users | First-time Investors | Traditional Investors |
🔹Be Clear About Your Investment Goals
Think before you invest: Are you investing for long-term goals (like retirement)? Or do you want to do short-term trading?
What is your risk tolerance?
Investment Goal | Suggested Instrument | Risk Level |
Retirement | Mutual Funds, Index Funds | Moderate |
Quick Profit | Individual Stocks | High |
Stable Returns | Bonds, ETFs | Low to Medium |
🎯 If the goal is clear, asset allocation will also become easy—stocks, mutual funds, ETFs or bonds.
🔹Stay Informed and Avoid Herd Mentality
Do not invest in the stock market with FOMO (Fear of Missing Out). Running behind the trend can be the reason for loss.
✔️ What should you do?
- Read financial news (Moneyandpaisa, Economic Times, etc.)
- Learn basic technical and fundamental analysis
- Review your portfolio from time to time
📌 Also remember this: Everyone’s financial journey is different. Make your own strategy, do not copy others.
🔹Final Thoughts
A Demat account is your first step towards financial empowerment and market participation. But to be a successful investor, you need more than just an account. you need knowledge, discipline, and a clear strategy.
Whether you’re a beginner or looking to optimize your investments; understanding these key aspects will help you make smarter financial decisions.
Ready to get started? Open a zero-balance Demat account today with a trusted broker and take your first step toward building wealth.
For more investing tips, guides, and insights, stay tuned to our blog!
🔹FAQs:
Q1: Can I open a Demat account online?
Yes, most brokers now allow online Demat account opening with e-KYC and Aadhaar-based verification.
Q2: Is there a minimum balance requirement in a Demat account?
No, there’s no minimum balance requirement. You can open and maintain the account without holding any securities.
Q3: Are Demat accounts safe?
Yes, they are regulated by SEBI and maintained by NSDL or CDSL, offering high levels of security.
