The Indian stock markets have been touching all-time highs, again and again. Since the march 2020 market crash bulls have taken strong control of the market. The major market index NIFTY50 has rallied from the low of 7,735.15 on 25th March 2020, to 15,853 on 14th June 2021. Nearly doubled up in 16 months.
This is stated as a bull-run. According to the experts, this is a bull run that we have never seen before. Bull-run is when all the financial assets increase at the same time. Currently, we are witnessing an equity market bull-run, a rally in gold prices. Also, crude oil once touched $0 in the year 2020, now it is near $75.
As per industry geeks, retail investors have played a very important role in this rally. As per the research report, by the State Bank of India, retail investor participation in the Indian stock market has increased to 45% from 39% in FY 2021. Also, this was calculated by looking at the demat account opening numbers. In the financial year 2021, there were 122.5 Lakh demat accounts added to the Central Depository Securities Limited (CDSL). And, 19.7 Lakh demat accounts were added to National Securities Depository Limited (NSDL). In total, 142.2 Lakh demat accounts were added.
Demat Account Opening Process
The millennials, who have access to the internet and have an abundance of information, just click away, and have mostly entered the stock market during the March 2020 market crash. Cheaper valuations have attracted a lot of millennials into the stock market. Plus, the lockdown has also acted as a catalyst in demat account openings. When the businesses were not open, the financial market was open. Thus, many individuals opened up new demat accounts and started trading.
Also, the major credit goes to the brokers. The brokers used advanced technology to open demat accounts digitally. During the pandemic, where everybody feared meeting anyone. Therefore, the brokers adopted new technology and accepted soft copies of all the documents that are required to open a demat account.
The entire process of opening a demat and trading account was digitally handled by the brokers. Moreover, the online procedure saved a lot of costs, therefore, the brokers started charging minimal rates for demat account openings. This was also one of the main reasons that attracted a lot of millennials in opening demat accounts.
Thing You Should Know About Demat Accounts
Documents Required To Open A Demat Account
These are some of the documents required for demat account. You need to get ready these documents at the time of account opening.
- Address Proof: Documents including, Adhaar Card, Electricity-bill, or any other utility bill with your name and permanent address can be used as address proof.
- Identity Proof: For identity proof, you can use any ID card that has your photo and name printed, but the ID card should be Government issued.
- Income Proof: Two most important documents you require as income proofs are the ITR file and Salary slips if you are self-employed and salaried professional, respectively.
- You also need proof of a bank account without which it is impossible to open a demat and trading account. You can use a canceled cheque, passbook, or bank statement as bank account proof.
How To Open A Demat Account Online?
You have to contact a depository participant (DP) to open a demat account. Depository Participant includes stockbrokers, commercial banks and other financial institutions.
The broker will then provide you with an application form to open a demat account. After completing the application form, submit it along with the above-listed documents. You need to do In-Person Verification which is basically a video verification done all by yourself and upload along with your application. Post which, you will receive the demat account log-in credentials. Once you receive the log-in credentials, you can start trading in the financial markets.
