Opening a Demat account is the first step towards holding shares and other securities electronically. However, what happens after the account becomes active? Many first-time investors may not know the next steps, whether it’s reviewing their account information or purchasing their first shares. Understanding the account will enable you to utilise it appropriately and prevent common pitfalls. It’s also crucial to know that holding securities and making trades are two different things, and can also be in two different accounts and services.
1. Your Account Goes Through Verification
Once the Application is submitted, the service provider verifies your details and fills in the necessary verifications. This can involve verification of your PAN, bank information, ID documents and more.
If all is well, your account will be activated. A confirmation message may be received containing the details of your account. The provider may make contact with you to fill in missing information or correct things that are incorrect.
After Demat app download, make sure you keep your account information secure and ensure that your mobile number and email address are correct.
2. Your Account Details Are Shown
Once activated, you can access your Demat account via the platform of the provider. You might be able to see your account number, associated bank information and more.
Securities are kept in electronic form in a Demat account. These can be comprised of shares, exchange traded funds (ETFs) and some other securities that are eligible. Once shares are credited to your account, you can view your shares via the account services available.
Before investing in your account, it is helpful to review your account details. This will help you understand where will your holdings be listed and where to get your statements.
3. A Trading Account is Linked
A Demat account and a trading account are two different things. The securities are held in a Demat account and the trading account is used to buy and sell securities in the stock market.
Some providers even have these two services combined, ensuring that it is easier to invest through one platform. But, just holding a Demat account isn’t enough to make trading in the stock market easier.
When you are purchasing shares, make sure your account has the necessary trading facility and that you have any extra activation procedures to complete.
4. Your Eligible Investment Options are Listed
After the necessary accounts are established, the investor can get to know the securities on offer for investment. They can be listed shares, ETFs or other market instruments, depending on the services offered.
If you are making an order, make sure to understand the main terms in the market. A market order, for instance, tries to perform at the most favourable price available; a limit order sets the price that you can be happy to purchase or sell at.
It is also crucial to know that stock values may fluctuate rapidly. Do your due diligence and research the company, financials and risks before investing. Avoid purchasing a security because its price has a tendency to rise.
5. You Can Track Your Holdings and Transactions
Once you buy securities, you can track your securities via the platform available. The number of securities held in your account and other information may be displayed in your account.
It is also advisable to check transaction statements and alerts. These records can be used to monitor if sales and purchases or other activities on the account have been captured properly.
Keep in mind that the value of your investment can go up or down based on the market. The value in your portfolio may not accurately represent the proceeds from a sale due to charges applied or changes in price.
6. Set Up Security Features
Account security is also crucial after the account is activated. Make sure to use a strong password and if available, use security features.
Do not provide or enter your login details or OTPs on any request by any individual. Don’t click on links or use untrustworthy apps to access your account. Get the official app from a trusted app store, and update it.
Details regarding your investments and transactions might be available in a demat trading account; therefore, regularly view account alerts. If you see something that doesn’t sound familiar, reach out to your service provider via the official channels.
Conclusion
Once you have opened a demat account, the next step is to verify your account and learn about the details and how to access your holdings. For buying/selling of shares, check whether the trading facility is enabled. It is also important to familiarise yourself with market risks and to review transaction records and keep your logon information protected. Investor sites like 5paisa offer online account services exploration. To start off, consult the relevant charges and features in