How to Use Demat Account

To use a Demat account, an investor must first open both a Demat and trading account. Their bank account needs to be linked with these accounts. After this, they could access the trading platform using the login credentials provided by the broker. All holdings appear in the portfolio section, including shares, securities, bonds, and mutual funds in electronic format. Once a trade is executed, the investor receives confirmation through email and SMS. The settlement usually follows a T+2 cycle, meaning the shares are credited or debited within two business days. 

Step-by-Step Guide to Use Demat Account 

Using a Demat account becomes easier when the steps are followed in order. Below is a clear breakdown of how an investor can use a Demat account. 

Open a Demat and Trading Account 

The process begins with selecting a SEBI-registered depository participant or broker. The investor must submit required documents such as PAN, Aadhaar, address proof, and bank details. Both Demat and trading accounts are essential. The Demat account stores securities in electronic form, while the trading account enables buying and selling in the stock market. 

You can Open a Demat Account with BlinkX for smooth, hassle-free, and seamless trading. 

Link the Bank Account 

The investor must link their bank account to both the Demat and trading accounts. This connection ensures smooth fund transfers. When shares are purchased, funds move from the bank account to the trading account. When shares are sold, the proceeds are transferred to the linked bank account after settlement. 

Access the Trading Platform 

The investor logs in using the credentials provided by the broker. The dashboard displays the entire portfolio, showing shares, bonds, securities, and mutual funds in electronic form. Exploring the dashboard helps the investor handle the platform more efficiently. 

Place a Trade 

The investor selects the required security and specifies the quantity. The broker routes the order to the stock exchange electronically. Automatic instructions and alerts may also be set to help monitor market movements and execute trades based on preset conditions. 

Wait for Settlement 

Settlement usually follows a T+2 cycle. The Demat account is debited when shares are bought and credited when they are sold. Confirmation is sent via email and SMS. Shares or funds appear in the respective accounts within two business days from the transaction date. 

Monitor the Portfolio 

The investor can track holdings regularly through the platform. Real-time updates, performance indicators, valuation tools, and detailed security reports help them make informed decisions. Portfolio composition can also be reviewed through the dashboard. 

How to Buy Shares? 

Purchasing shares requires careful execution. The following steps outline the process clearly. 

Fund your Trading Account 

The investor transfers funds from their bank account to the trading account. Sufficient balance must be maintained to cover share prices and brokerage charges. Some platforms allow instant transfers, while others depend on bank processing time. 

Log in to the Trading Platform 

After logging in, the investor should ensure their account is active and all linkages are functioning correctly before starting a transaction. 

Search for a Stock 

The investor can use the search function to find a company by name or trading symbol. Market price, historical performance, and other trading details can be reviewed before placing an order. 

Place a 'Buy' Order 

The investor selects the stock and specifies the quantity. 

A market order executes instantly at the current price. 

A limit order executes only when the stock reaches the investor’s preferred price. 

Confirm the Order 

Before final submission, the investor needs to review details such as stock name, quantity, order type, and transaction amount. Once confirmed, the system forwards the order to the stock exchange. 

Settlement 

Purchased shares are credited to the Demat account within the T+2 cycle. Funds are deducted from the trading account, and the investor receives confirmations via SMS and email. 

How to Sell Shares? 

Selling shares involves a structured process that helps ensure smooth transactions. 

Log in to the Trading Platform 

The investor accesses the trading platform using their credentials and verifies the availability of shares in the Demat account. 

Go to the Portfolio 

The holdings section displays all securities along with quantity, market value, and performance. The investor selects the stock they want to sell. 

Place a 'Sell' Order 

The investor specifies the quantity and selects an order type: 

Market order for immediate execution 

Limit order to sell at a preferred price 

Stop-loss order to limit losses by automatically triggering a sale at a set price 

Authorise the Sale  

Some platforms require additional verification, such as OTP authentication, to ensure secure transactions. 

Confirm the Transaction 

The investor reviews and confirms the details. The system processes the sale and forwards the order to the stock exchange. 

Settlement 

After execution, shares are transferred to the buyer’s account. The proceeds are credited to the investor’s linked bank account within the T+2 settlement period. Confirmation is shared via SMS and email, and transaction status can be tracked on the platform. 

Understanding how to buy and sell shares through a Demat account helps an investor manage their investments efficiently.

Conclusion 

Using a Demat account helps investors manage their securities in a convenient electronic format. They can open both accounts with a SEBI-registered broker, link their bank account for smooth fund transfers, and place trades through market or limit orders on the platform. All transactions usually follow a T+2 settlement cycle. Monitoring investments regularly through a stock market trading app helps investors make informed decisions and track portfolio performance effectively.