How To Invest Using Demat Account

How To Invest Using Demat Account

If done properly, stock market investing may be quite rewarding. Technology has made trading more accessible to the general population, and a Demat account is one method to invest in the stock market. In this post, we'll define a Demat account and go through how to invest using Demat account.

What Is A Demat Account?

Before we learn how to invest using Demat account, let’s quickly understand the Demat account definition. Stock market investments might be highly lucrative if done correctly. A Demat account is one way to trade in the stock market, and technology has made trading more accessible to the common public. The definition of a Demat account and instructions on how to invest in Demat account online are covered in this article.

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Table of Content

  1. What Is A Demat Account?
  2. How to Open a Demat Account?
  3. How to Invest Using Demat Account?
  4. Tips for Investing Using a Demat Account
  5. Account Opening Requirements

How to Open a Demat Account?

The procedure for open a Demat account is simple. A bank, a stockbroker, or other financial organisation that offers Demat services is where you may open a Demat account. How to open a Demat account is as follows:

  1. Entered & verify your mobile number and email ID
  2. Enter PAN, Aadhar card details & link your bank account
  3. Submit documents via Digi locker
  4. Upload a selfie & signature
  5. Select plan & eSign

You will be given a special Demat account number (DP ID) after your Demat account has been set up. You can conduct stock market transactions using this ID.

How To Invest Using Demat Account


How to Invest Using Demat Account?

Let's look at how to invest using Demat account now that you've created one. 

  1. Select Your Broker: In order to purchase or sell shares, you must select a broker who offers trading services. Based on things like a broker's reputation, fees, trading platform, and research reports, you may make your decision.
  2. Fund Your Account: You must fund your trading account in order to purchase stocks. Your connected bank account can send money to your trading account.
  3. Place Your Order: You can place an order to purchase or sell securities after your account has been financed. You can place an order by making a phone call to your broker's customer service or using the trading platform of your broker. After purchasing securities, you may keep track of your holdings in real time by logging into your Demat account. Regular updates on your holdings and any transactions in your Demat account will be sent to you.
  4. Sell Your Holdings: Using the trading interface provided by your broker, you may submit a sell order whenever you wish to sell your holdings. The money will be credited to your trading account when the order is completed.

Tips for Investing Using a Demat Account

Here are some handy tips on how to invest using Demat account online.

  1. Do your homework: Before making an investment, thoroughly investigate the business and the stock you intend to purchase. Examine the company's management, financial accounts, and market developments.
  2. Diversify your portfolio: Portfolio diversification is essential for lowering investment risk. Instead of putting all of your money into one stock, spread it out among many stocks from various industries and asset classes.
  3. Stay Updated: Stay updated on news and changes affecting the stock market. Keep up with any legislative changes that may have an impact on your investments, as well as the businesses you have invested in.
  4. Have a Long-Term Perspective: Stock market investing is a long-term game. Do not be influenced by brief market gyrations. Consider the long term and make investments in businesses that have a proven track record and expansion possibilities.
  5. Keep a Record: Keep a record of all your Demat account transactions and assets. This will assist you in monitoring your progress and making future investing decisions that are well-informed.

Account Opening Requirements

After learning how to invest in Demat account, let's discuss account opening requirements. The first step is to choose a broker that can assist you in understanding the account opening process. There are several factors to consider when choosing a brokerage, including fees/charges, client benefits, additional offices, and the platform's interface and experience (UI and UX).

There are two methods to open a Dematerialised account: the conventional method (paper form) or e-KYC, which is a paperless registration method that can be done online.

Traditional Method

  • As part of the traditional account opening process, you must fill out a hardcopy form and attach proof of your identity and address. You can submit these proofs by submitting photocopies of the necessary documents.
  • You will be given a Demat account number when your documents and forms are processed. It is called the Beneficial Owner Identification Number (BOID).
  • In addition, you will receive additional personal information, such as a login ID and a key to use online gateways.

Online Method (e-KYC method)

A simple eKYC can now be completed online without requiring investors to complete a lot of paperwork. With E-KYC, the broker verifies your information using your Aadhaar card, gets you to upload your documents online, and you're done. To get started, follow these steps:

  • Go to the online account opening page and fill in your essential details like name, phone number, email, etc.
  • You will need to upload the required documents (Aadhaar, PAN, cancelled check, and the latest bank statement).
  • To verify your identity, enter the 12-digit UIDAI number on your Aadhaar card, along with the OTP sent to your linked mobile number.
  • You will be redirected to a separate web page to upload your documents following the account opening process.


An easy and safe method to invest in the stock market is through a Demat account. You may begin your investing adventure with confidence by paying attention to the aforementioned stages and advice. Do your homework, diversify your holdings, stay current, adopt a long-term perspective, and keep track of all of your transactions. Invest wisely!

FAQs on How to invest using Demat account

A Depository Participant's (DP) minimum opening deposit differs from one DP to another. To create a Demat account, certain DPs may need a minimum balance of 5,000 or 10,000 rupees.

Yes, you are allowed to have more than one Demat account, but you must make sure that none of your holdings are present in more than one account. Keeping numerous Demat accounts open may result in additional fees and charges, which is also crucial to mention.

Account opening costs, annual maintenance fees, transaction fees, and additional fees and charges assessed by the Depository Participant (DP) are all linked with a Demat account. Before creating a Demat account, it's critical to comprehend these fees.

The verification procedure and the Depository Participant (DP) you select will affect how long it takes to create a Demat account. The time it takes to create a Demat account might range from a few days to a few weeks.

A trading account is used to purchase and sell assets on the stock market, whereas a Demat account stores your stocks in electronic form. Your Demat account is linked to a trading account, and in order to purchase securities, you must transfer money from your bank account to your trading account.