Before getting to safety tips, you must understand the working of Demat accounts. A Demat or dematerialisation account is meant for holding financial instruments for a desired period. Let us say you bought shares of a company via a trading account. You intend to hold on to company shares for at least six months. In such a case, the role of the trading account was only to purchase company shares. You need a Demat account to hold them for six months or more. Demat accounts can hold a wide range of securities in electronic format. With Demat accounts, investors do not have to take care of physical trade certificates.
Investors can apply for an online Demat account with a broker. You can also apply for a new dematerialisation account with a reliable depository participant. It is better to apply with a broker, as it can also help you open a new trading account. You can apply for a trading cum Demat account with the same broker and link them for the seamless transfer of securities. Religare Broking is the best trading company in India, offering Demat and trading accounts for free. Once you obtain a Demat account, you must follow a few rules to safeguard the securities. Here are some tips to keep your Demat account safe at all times:
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Safeguard the Login Credentials
You will receive login credentials for a Demat account from the provider. Investors can choose to change the default password provided by the broker. You cannot offer Demat account credentials to anyone. Keep the login credentials to yourself, and do not write them anywhere. It is better to memorise the login credentials to avoid hassles. If someone with malicious intentions gains access to your login credentials, there might be consequences. Keep changing your Demat account password at regular intervals to avoid fraud.
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Update Your Contact Details with the Demat Account Provider
Your broker or depository participant will have access to your mobile number and email address. If you intend to change your contact details, notify the Demat account provider. You can communicate via your email address or mobile number in case of fraud.
Your broker or depository participant will have access to your mobile number and email address. If you intend to change your contact details, notify the Demat account provider. You can communicate via your email address or mobile number in case of fraud.
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Monitor Your Demat Account Activity
It is essential to monitor your Demat account activity at all times. If any inconsistent trades occur, report them to the Demat account provider. Report suspicious or unauthorised transactions in real time to the Demat account provider for quick action.
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Secure Your Delivery Instruction Slips
A DIS (Delivery Instruction Slip) is used for the transfer of securities from one account to another. Keep all your delivery instruction slips in one place, and do not lose them.
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Read the POA (Power of Attorney) Terms
When you apply for a Demat account with a broker or depository participant, you sign the POA document. It gives the Demat account provider the power to carry few actions on your behalf, like dematerialisation, settlement, and pledging.
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Avoid High Demat Fund Balance
Do not keep an exceptionally high fund balance in your Demat account. Keep the amount you wish to invest in your Demat account to avoid fraud.
In a Nutshell
Have you applied for an online Demat account for holdings? You must keep your Demat account secure via password at all times. Also, monitor account activity to report fraud or suspicious trades in real time. Safeguard your Demat account now!
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