As per the guidelines by SEBI, it is very necessary for an individual to have a Demat Account if he/she wishes to make any type of investment in the stock market. That makes learning about types Demat Account as much important as having it to trade. Unless you have a Demat account, you cannot participate in any type of stock market trading. But to have the right type of stock trading account is necessary to make meaningful stock market trading choices.
Also, there are some indirect participation you make into the market, let’s say if you invest in mutual funds, you are indirectly participating in stock market trade, but you don’t need a Demat account for investment. So, a Demat account is necessary to have in only direct investments made in the stock market. There are three types of Demat accounts. Here is a complete detail of each one.
Types of Demat account
Fundamentally, there are three different types of Demat accounts available to traders. Each of these Demat account types fit different needs. These are as follows:
1. A Repatriable Demat account: Even Non-resident Indians can have the option to trade Indian securities and this can be done using a repatriable account. It allows traders to transfer funds abroad. Hence, to be able to use this type of account one needs an association with a Non-Resident External (NRE) account bank account.
2. A Regular Demat account: This is a Demat account that is recommended to any traders who reside within India.
3. Non-Repatriable Demat account: For non-resident Indians in particular, this is another Demat account which is recommended. Funds cannot be transferred abroad through a non-repatriable Demat account. To be able to use this type of account one needs an association with a Non Resident Ordinary Account bank account.
Conclusion:
These above mentioned Demat accounts are made specifically to serve various purposes. For any resident Indian, a regular Demat account can help them process all their stock market investments and keep track of transactions other than Futures and Options. It is very simple to create; we at TradeBulls can even help you further by helping you make the right investment choices as per your financial goals.
Also if you are an NRI the world of trading is totally different, there are many restrictions that have been put, you can always rely on our professional traders to help you in that course like conforming to the rules of Foreign Exchange Management Act that make a repatriable/ non-repatriable Demat account.