Many people are interested in whether or not the stock market has risen or fallen. The first and most crucial step in making the plunge is to open free Demat account. Demat accounts have more than doubled in the last three years, reaching 7.38 crores in the process.
With the help of a Demat account, you can hold stock market shares as well as other securities such as Initial Public Offerings (IPOs), bonds, government securities, mutual fund units, and exchange-traded funds (ETFs).
It is important to note that Demat accounts not only ensure the security of financial investments but it also facilitates the ease of handling and maintaining them.
How to Open a Demat Account Online?
You can apply online for the opening of a Demat account with any DP you are interested in working with. In just a few clicks, you can open a Demat account online from the comfort of your home or office at any time you want.
To open a Demat account online, first, you have to visit DP’s website; there, you’ll have to enter your basic details, such as name, mobile number, email, etc., on the account opening form. After that, as soon as the DP gets in touch with you for the above-mentioned formalities and verification, you will be able to open a Demat Account.
So, do we actually require the Demat account for Mutual Funds? Let’s get to it.
Is a Demat Account Required for Investing in Mutual Funds?
Many people wonder whether or not they need a Demat account to invest in mutual funds. To invest in stocks, a Demat account is mandatory; however, it is not mandatory for investing in other securities. It is important to note that even though you do not need the account to buy m mutual funds, it can still be helpful to have one.
Investors used to receive physical certificates for stocks and other investments before the internet, and personal computers became widely available. But as data becomes increasingly computerized, investors can dispense with physical certificates by opening a Demat account. Through electronic bookkeeping, investors can buy, hold, and sell mutual funds online.
Documents Required to Open Demat Account
Demat accounts are similar to bank accounts. The first step toward opening an online Demat account is to have the documents required to open a Demat account. You will have to upload your PAN card and address proof, which can be done by logging into the website of the broker/bank that will be managing your Demat account.
Generally, the documents that are mandated to be provided are basically the same for brokers, banks, and other financial institutions that provide online trading platforms. In addition, you will have to ensure that the papers are valid on the submission date and that they have not passed their expiration date.
Personal information: You must provide proof of identity and proof of address in the prescribed format. When you provide your PAN and other documents to the brokers or banks, they will pre-fill those forms for you.
Details about your bank account and income: In order to open a Demat account, you will need to have your bank account number and IFSC code. You do not need to worry as the data is safe with the broker.
In addition, you will also have to submit two to three photographs as proof of your identity to your Depository Participant (DP).
Conclusion
Hordes of investors search for mutual funds as one of their most preferred investment instruments. You can expose yourself to multiple asset classes using this versatile and flexible tool. Many people use it because of this. With or without a Demat account, you can invest in mutual funds.
With a Demat account, however, the management of your portfolio and the evaluation of the mutual funds become relatively simple. In addition, equity-based investments require a Demat account. Eventually, you will need it. What are you waiting for? Sign up for your Demat account now and begin investing.
The post Is Demat Account Required for Mutual Funds? appeared first on Paisabank.
