What are the common mistakes to avoid when opening a demat account?

livemint.com:

So you have decided to take the plunge into the financial world and start chasing the equity rainbow, or park some of your funds in that mutual fund scheme that you have researched so thoroughly. Well, the first step is always the paperwork, more specifically a demat (short for dematerialisation) account in this case.

And like most paperwork make sure that you dot your I’s and cross your T’s, in that case quite literally.

 

“Look at a demat account as functioning similarly to a savings account in which we deposit and withdraw funds," says Samir Shah, Head — Online Business, Axis Securities, explaining about the utility of a demat account.

In a demat account, one may hold various financial instruments such as stocks, mutual funds, insurance policies, exchange-traded funds, etc.

In the past, these instruments existed in physical form. Dematerialization simplifies the process by storing them electronically, much like how UPI simplifies payments compared to cash.

When opening a demat account, choosing between NSDL and CDSL depositories is the first step.

Select your company of choice and be aware of any account maintenance charges. Once you have narrowed down on your choice, keep your PAN card, Aadhaar card, and a cancelled cheque handy.

Nowadays, most depository participants allow online account opening for faster processing, often within 24 hours if your current mobile number is linked to your Aadhaar card.

To effectively maintain your account, it is advisable to appoint a nominee and link your PAN card with your Aadhaar card.

“One should read the form thoroughly and especially put nominations etc," says S Ravi, Founder,Ravi Rajan & Co.

 

Again as in most paperwork in the world, mistakes happen due to oversight,