A demat account, short for dematerialized account, is an account that holds financial securities in electronic format. It eliminates the need for physical certificates and simplifies the process of buying, selling, and holding securities. Demat accounts are essential for trading in shares, bonds, and other financial instruments on stock exchanges.
Applying for a demat account is a straightforward process that can be completed online or through a bank or brokerage firm. Individuals need to provide their personal and financial information, such as PAN card, address proof, and bank account details. Once the application is approved, the account can be activated and used for trading.