Benefits of Linking Demat Account to Savings Account

If you want to invest on share then Demat Account is required which allows investors to hold their shares in an electronic form. There in Demat account, stocks remain in dematerialized form.

Dematerialization is the process of converting physical shares into electronic format, in a way to hold shares and securities electronically, thereby eliminating the requirement for physical paper certificates. However, to dematerialize financial instruments, you need to start a Demat account with a depository participant (DP), who could be a financial institution, a bank, or a licensed Securities Exchange Board of India (SEBI) agent.

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A DP is an intermediary between an investor and the depository. India has two depositories namely the National Securities Depository Limited (NSDL) and the Central Depository Service Limited (CDSL). Both the depositories are responsible for managing shares and securities in an electronic format.  

Similar to a bank account, a Demat account credits and debits shares and securities as and when you buy or sell shares. For more information about a Demat account, read on to know why a Demat account is beneficial for investing in the stock market?

Linking Demat Account to Savings Account

In Demat account, money needs to be transferred from saving account thereby needing to get it linked. Whenever you need to buy shares then money is required and if it is interlinked with your saving account then you can transfer money to it from your saving account.

Whenever you need to sell shares staying at your Demat account, after selling those shares you can transfer money back to your saving account from here. So it is convenient and two way process, so interlink is needed.

The Connection Between Demat Account & Saving Account

If you’re an investor looking to invest in the share market, then it is essential to open a Demat account, a trading account and link it to your savings account to invest smoothly. A trading account is mostly used for buying and selling orders. By linking a Demat account and a saving account, you can seamlessly transact orders as the money will automatically get debited from your savings account and the shares will get credited to your Demat account. It is also known as the 3-in-1 account, which is a combination of Demat, trading, and savings account. This type of account offers a comprehensive online wealth-management solution, with an easy-to-use interface, regular insights and research reports, and state-of-the-art execution. Plus you can navigate through various financial markets effortlessly, on the web or across mobile devices. All these benefits have made the 3-in-1 account an effective platform for everyone, be it seasoned professional traders or market novices.

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Benefits Of Linking Demat Account To Saving Account

1. Efficient Investing Method

Trading can be stress-free and simple if you have access to all your investment accounts, along with transparency on how much you will be spending for each transaction. By linking your Demat, savings, and trading account, you get the ease of buying and selling financial instruments such as derivatives, equity, mutual funds, IPOs (initial public offerings), ETFs (exchange-traded funds), bonds etc. all under the same platform.

2. Transparent Pricing

When you link your Demat account and savings account, the fund transfer is generally free across multiple DPs. Moreover, there is no upper limit/cap for fund transfer. With this, investors get transparent and competitive pricing that suit their needs.

3. Flexible Investment Platform

You can stay on top of your financial game at all times by linking your Demat and savings account. You will never miss an opportunity as you will be trading effortlessly from your smartphone, tablet or laptop. With advanced web platform and real-time streaming market data, you can make lightning-fast investments while also considering other investment options with a 3-in-1 account.

4. Make Informed Investment Decisions

The true success behind the art of investing is choosing the right stock at the right time! This is the reason why there are many experienced DPs who identify stocks based on trends and research so that a trader can invest with conviction. Additionally, a trader also gets access to the inner working of global financial markets. It can benefit a trader as they have access to in-depth investment, trading, mutual fund, and economic reports along with videos incorporating the summary of these reports.

5. ASBA Facility Available For IPO Orders

ASBA (applications supported by blocked amount) is a process wherein the IPO application amount doesn’t get debited from your savings account till the time you have been allotted the shares. This way, you will not miss out on the interest generated and your bank balance will not get debited from your savings account.

Important Points To Remember while linking Demat Account with Saving Account

For linking Demat and savings accounts, it is vital that your details across accounts that are presently linked and the one requested to be linked are the same. Ensure that your name, date of birth, address and signature matches across all accounts.

The internet banking facility may not be provided to a power of attorney (POA). Thus, the POA will not be able to link their savings account with the main Demat account.

In case of a joint account, the request for linking Demat and savings accounts may not be accepted online, and you will have to visit your DPs/bank office. It is mandatory for all joint account holders to sign the form at the same time.

An investor no longer needs to remember multiple user IDs and passwords for your investment accounts! With the 3-in-1 account facility, you can easily link and view all your accounts like Demat, trading and saving at one place! Additionally, you can also link your Demat account and saving account to a single internet banking platform for safe and secure transactions.

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