Prior to gaining an understanding of how to open a demat trading account online, it is essential to have a basic understanding of what a Demat account is.
Generally, you need to have a Demat account to buy and sell stocks and shares without having to deal with paperwork that is redundant and unnecessary. It is not only speedy but also practical and easy to use.
Just like an online demat account where the user has to maintain a minimum amount at all times, a zero-balance demat account offers all the features of a demat account without imposing that restriction. This guide lists the basics of a zero-balance demat account meaning and how to open a zero-balance demat account. Let’s begin.
Components Of A Zero Balance Demat Account
A zero balance demat account comes with a few key aspects. Listed below are a few things that you need to understand before opening a zero balance demat account.
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No Brokerage Fees For Everyone
Demat account allows you to trade in every market section without having to pay a brokerage fee. You can use this account to buy or sell any financial instrument, including debt, equities, commodities trading, futures, and equity, without incurring any fees.
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Zero Brokerage For Only Delivery
These accounts provide free brokerage for the purchase and sale of individual stocks in the cash category. Many inexperienced investors who are picking up the ins and outs of stock trading are usually drawn to these accounts.
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Accounts Based On Plans
The majority of users of this kind of zero brokerage account are those who trade frequently and in large volumes. It works best for intraday traders.
As a customer, you must first sign up for one of the available monthly or annual plans to receive the zero brokerage fee. Knowing these plans is essential before you decide to open a zero balance demat account online.
How To Create A Demat Account With No Balance?
Creating a Demat account with no balance is quite easy. Follow the steps listed below to get started.
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Select the correct provider
As stated earlier, make sure you have a list of all the Demat account providers that offer zero-balance accounts. Search for trustworthy companies with a track record of positive customers and reviews.
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Account opening
Following the initial step, you have to open a demat account. The majority of providers usually allow customers to open a Demat account online without any initial balance.
After you shortlist all the providers, visit each one’s official website to better understand it. Scroll down to find the account opening section.
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Fill in the necessary details
Under this section, enter all the required information. Verify that the information you entered is correct. Usually, this consists of your name, contact details, bank account information, etc.
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Finish the KYC process
Completing the Know Your Customer (KYC) process is necessary to comply with regulatory requirements.
If requested by the provider, it will also contain the Aadhaar number, PAN (Permanent Account Number), and other important information.
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Verification
The provider will review the documents you have provided and determine its accuracy.
After a successful verification process, the provider will initiate the approval procedure under which you can open a zero balance Demat account. Upon approval, you will receive your account details.
Wrapping Up
Before selecting a zero balance demat account, it is important to compare all of the plans and determine whether there are any additional costs/hidden costs.
Furthermore, look for the necessary taxes and transaction fees levied by stock exchanges. Generally, brokers fail to disclose this detail if you don’t follow up thoroughly.
All in all, if you carefully follow the basic instructions, starting a zero balance demat account is not that difficult to get going.
