Demat account is the primary requirement to the enter the stock market. Stock exchanges of the country don’t promote the trade of share and other stock market commodities in the physical form. They should be stored in electronic formats and the demat account is used for the purpose. This account is not used for cash transaction and you need another account named trading account for that purpose. So it is the demat account that makes the entry to the stock market and is the reason why every stock broker or stock broking firms provide different demat account plans to attract the investors.
Demat account for free of cost
There are two important types stock brokers in the stock market and they are called discount brokers and full-service brokers. As the name suggests full-service brokers provide the complete range of stock market services at a good service charge when compared with discount brokers. These brokers, on the other hand, works as a bridge between the stock exchange and the investor. Reputed discount brokers provide the investors with Free Demat Account to promote investments. But since there come several other expenses than opening the account, have a look at all of the related services and cost for the same to select the best in demat account.
Since you need a trading account along with demat account, it is a good idea to select the brokers who provide both of the accounts at free of cost or minimal charges. This helps you a lot to save a good amount on account opening cost. Make sure that your account helps you trade at affordable costs and provide important services including trade on call, better online platforms, brokerage calculator and margin calculator. These are some of the important factors to keep in mind when selecting the free account. Also, have a look at the brokerage and maintenance cost.
Brokerage and maintenance cost
Even though account comes for free of cost, most of the brokers can charge a certain amount as the brokerage for each of the trades. Since trading accounts are maintained online for a good period of time, the stockbrokers can collect some amount as maintenance cost. Usually, these cost is collected in advance for a year as annual maintenance cost at the time of opening the account. But now you can save maintenance and brokerage cost since there are reputed stockbrokers to provide the plan with the free maintenance of trading account and zero brokerage charges.
Your free demat account carries a transactional cost for the trades executed through the account. Hence make sure that the stock brokers provide the services at really less transactional cost when compared with others. There is nothing to benefit from the free account if the broker charges high transactional cost for the services.
So don’t make a quick jump just looking at the words ‘free account’. Make a good comparison of the account plans in accordance with the overall cost incurred for executing trades. This is how wise investors select the best in Free Demat Account to enjoy trades at rock bottom rates.