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Share Market Some FAQ
Everyone who is interested in the stock market always asks the question, what exactly is a demat and trading account? What is the purpose of this account? How to open a demat and trading account by getting answers to these basic questions?
What is a demat account?
A demat account is for holding your purchased shares through a stock exchange.
Demat is an acronym for Dematerialisation.
It preserves stocks, government bonds, mutual funds in electric form.
In the past, certificates of purchase of shares were issued in physical form. If they were lost or misplaced, then there would be a big problem.
What is a trading account?
In a trading account, you keep an account of securities and cash. From this account, daily trading is done.
The trading account is provided by the broker.
How to open Demat Account and Trading Account?
Demat account and trading account can now be opened easily. Now Bares offers discount brokers and full service brokers in one day.
In India, demat account services are provided by NSDL and CDSL. This facility is provided through brokers and intermediaries. These brokers are called depositary participants. Demat and trading accounts are opened through brokers with proof of identity and some documents.
Demat and Trading Account
You need the following documents to open it?
Bank statement or canceled check
Your trading and demat account is created within a day of submitting these documents.
We learned about demat and trading account in the previous article. We buy shares in a trading account and then the shares are stored in a safe place in the form of a certificate in the demat account you open, this is done by the Central Depository Service.
Briefly about CDSL
Central Depository Service was established in February 1999. In CDSL your shares, government bonds as well as mutual funds etc. Handles like a locker. And at the time of sale, T-Pin is asked as an identity of yours, only if it is put, the shares can be sold.
What is a T-pin?
When you buy shares, those shares are saved in your demat. But when you sell those shares, you have to prove your identity with T-Pin. Otherwise, you cannot sell any shares in demat.
T-PIN stands for Telephone Personal Identification Number, which is a 6 digit number. The T-pin is provided by CDSL without any interference from the broker.
How to get a T-pin?
To get a new T-pin, first you need to go to CDSL’s home page.
Enter your BO number and PAN card number and click Next.
Clicking on Next will send an OTP to your registered mobile number.
After entering the OTP, you receive your T-Pin number from CDSL on the registered mobile number and on the registered e-mail.
How to change T-pin?
First you need to go to CDSL’s HOMEPAGE.
Then click on Change – eDIS PIN.
Here you enter your BO number and PAN card number and click on Next.
Clicking Next will send an OTP to your registered mobile number.
After receiving and submitting this OTP, you receive your new T-PIN on your registered mobile number and registered e-mail.
This way we can get a T-Pin at the time of sale of shares.