Demat Account | Which Demat Account is best In India? Types of Demat Account | Pros & Cons of Demat Account | Hidden Charges & Brokerage Charges of Demat Account | Investerguider.com

Demat Account |  Which Demat Account is best In India? Types of Demat Account | Pros & Cons of Demat Account | Hidden Charges & Brokerage Charges of Demat Account | Investerguider.com 

Introduction: What is Demat Account? 

If you want to buy and sell the shares of a company or a mutual fund or want to take ETFs or want to invest in an IPO. Then, a Demat account is compulsory. The Demat Account is an electronic locker where your shares and investments are safe. It is provided by a Stock Market Broker.

Earlier, there were physical certificates; now it's digital.

Now the question is which broker we can choose.

Demat Account |  Which Demat Account is best In India? Types of Demat Account | Pros & Cons of Demat Account | Hidden Charges & Brokerage Charges of Demat Account | Investerguider.com 

In the market mainly 3 types of brokers are there. They provide accounts.

1. Full-Service Brokers (They provide advisory & offline branch services.)

2. Discount Brokers (Online service only)

3. Bank Brokers (The bank brokers linked with your existing bank account)

They have their own pros and cons. Let's understand in detail.

1) Full-service Traditional Brokers

They are old-established brokers. They have offices all over India. They provide personal advice.

Pros of Full-service Traditional Brokers

1. Relationship manager Support

Here you get an RM who helps you with investments, IPO allotments, and Large trades. They guide you.

2. Detailed research reports & stock tips.

They provide quarterly result analysis on a daily basis through emails.

3. Offline Branch Facility.

They provide an offline branch facility to connect face-to-face paperwork.

4. Portfolio Management & Extra Services

They provide all types of facilities under one roof

5. Delivery Margin Funding & Premium Products

They provide margin in derivatives for extra leverage.

Cons of  Full-service Traditional Brokers

* High Brokerage Charges 

0.3% - 0.5% per trade 

*Hidden Fee & Complex Tariff

Statement Charges, debit fees, etc.

*Aggressive Cross-Selling

2) Discount Brokers

They have become popular in the last 10 to 12 years. 

Pros of  Discount Brokers

*Super Low-Cost Broker

  ₹10-20 PER TRADE

*Fast Modern Apps Tools

TradingView integrated charts. 

*Paperless Quick Onboarding

Everything you can get online. Online account opening everything Is paperless

*No Pussy Calls

 No one is going to disturb you with their new techniques and new support system.

Cons of  Discount Brokers

*No Personal Advisory from experts

No one is going to give tips and guidance from any one.

* Slow Support System

Mey the customer support delays your complaint or any query

*Limited Margin

3) Bank-Affiliated Brokers

This broker directly integrates with your bank account.

Pros of  Bank-Affiliated Brokers

*3-in-one Accounts

Saving Bank Account, Trading Account, and Demat Account under the same roof.

*IPO & ASBA seamless

You can directly do net banking to apply for an IPO.

*Brand Trust

You are absolutely going to open your savings account at a trusted bank, so your money and shares are safe under one roof.

*Loan Against Shares Easy

A loan is easy for you because the bank knows about your portfolio, and it's easy to get a loan from the same bank.

Cons of  Bank-Affiliated Brokers

*High Brokerages 

Bank brokers are high in brokerage fees

*Old Technology

No new charts in any app system crashes are common in this.

*Hidden Annual Fees

Bank have their annual fees also for the demat account

Now 

How were we going to decide which demat account is best...?

There are some self-check questions that help you to choose the best demat account.

1. Are you a beginner and active trader?

*For beginners, advice + RM is helpful.

*Active traders need low brokerage and fast platforms.

2. How many times have you been planning to take the trade?

*If 2-3 months, then broking is not going to impact much

*If you were going to do it on a daily basis, then discount brokers are best.

3. If you were going to do research and analysis by yourself, would you want tips?

*If you can do it by yourself, then a discount broker is best.

*Otherwise, a full-service broker is best for you.

Thank you so much for giving your valuable time to read this article. I hope you enjoyed reading this article. If you have any doubt or queries you can comment here or contact us directly. We will love to hear from your side and help you.