Question

What is a Demat Account‎

Answer 1

     Demat account is a bank account which is used for monetary transactions related to sale and purchase of shares in the primary and secondary share market.  Demat a/c is a short form of Dematerializing account.

    The demat account is compulsory for any transaction in the share market in India.  This is introduced to have the right accounting related to share market, and to avoid benami transactions leading to black money.

    In this account the various certificates related to the shared and securities issued by the companies are held in electronic form.   The transactions are handled by brokers or sub-brokers.   Demat account is registered with a sub-broker or broker.

Answer 2

Demat account number is quoted for all transactions to enable electronic settlements of trades to take place. Every shareholder will have a Dematerialized account for the purpose of transacting. Access to the Dematerialized account requires an internet password and a transaction password.

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