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How To Transfer Demat Account From One Broker To Another?

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Trading in the stock market requires an online demat account to help you accumulate your financial assets and securities digitally. However, like options and futures trading, online financial contracts don’t require a Demat account. Demat accounts, short for dematerialised accounts, are maintained by two organisations in India: NSDL and CDSL. 

Why is this account so important, and how can you change brokers with the same account? Let’s understand.

Why Is It Compulsory To Have A Demat Account?

 If you wish to trade in the share market, or buy stocks from the largest US defense contractors, it is compulsory for you to first open a dematerialised account in a bank or through the Stock Broking Platform of your preference. Like a bank holds and maintains your money and savings, an online Demat account stores and maintains your shares digitally while you trade. A trading account is also crucial for trading in the share market.

Choose The Right Broker For Your Demat Account

Choosing a good broker in a competitive market like India can be perplexing when you are a new investor. You must look for the following features in a broker:

  • Online trading is all about complex computing and technology. Someone with a stable record of expertise in using trading technologies and a set-up at home can be a major point to consider here. 
  • You could end up in fraud in several ways if the broker you choose does not have transparency in his pricing policies and details.
  • An efficient and highly visionary management team should stay at the back of the broker for the best trading experience.
  • Be alert about the brokerage fees being charged. It is good to be charged low, but at what cost? Never compromise on the quality of brokerage, even if you are looking for a budget fee.
  • Proper background research and awareness of market requirements are needed to choose a good broker.
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How To Transfer Demat Account From One Broker To Another?

There might be instances when you are not satisfied with your current broker’s performance or you just want to change the stock broking platform of online trading but don’t want to face the hassle of creating a new online demat account. In that case, you can transfer your current demat account to a different broker in a few simple steps:

  1. On the CDSL website, you will find the option “Register Online”, under which you’ll get a form. 
  2. After filling out the form, you are suggested to keep a hard copy of the form while the account is transferred to the DP for verification.
  3. You will receive a password on your registered email address, which can be used to log in and transfer your shares successfully.

Conclusion

A demat account can be transferred by both online and offline means. In case the other broker has a different registration, you need to transfer the account offline, to which the form would be available in the broker’s office. The offline mode might feel a bit sceptical, but in reality, it is completely safe and does not result in any loss altogether. Absolutely go for it!

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