It is important to understand your statement of Demat holdings if you are planning to invest in the stock market. Let’s take an example to grasp this better. After considering the time required for a cheque clearance, you would review your account’s statement if you were to deposit a cheque at a bank.
Similar to this, you, as an investor, need to check the statement of Demat holdings when you sell or buy any stock. By doing this, you get to see if it is debited or credited to your Demat Account. Let’s take a look at the basics once.
What is a Demat Account?
The moment investors decide that they wish to invest in the stock market, they must open a Demat account with a Depository Participant (DP). Now, DPs are generally broking companies that are registered with Central Depository Services (India) Ltd (CDSL) or the National Securities Depository Limited (NSDL).
These maintain a record of every demat transaction that has been made. Your Demat account may also alternatively be referred to as a ‘client beneficiary account’ or a ‘client Demat account’ from the standpoint of a DP.
What Is A Demat Account Holding Statement?
In simple words, the demat account holding statement acts as solid evidence or let’s say, proof of confirmation from the depository participant. This statement signifies that you, as an investor, have made certain transactions in the specified shares.
As a result, the shares’ balance is indicated in the demat holding statement. However, holding statements can sometimes cause trouble. You need to ensure checking this statement more often to identify any abnormal transactions or discrepancies.
In short, you can get a detailed picture of all the share and security transactions you have made over a specific period, through your demat account holding statement. In a nutshell, the statement acts as definitive verification of the ownership of the securities and proof that the transactions in the Demat account are occurring.
It is important to note that every Demat Account holder has free access to this statement. You may use this regularly to monitor your demat account and equities trading, set any financial objectives, and know their net worth at all times.
Any anomalies or unlawful debits to your demat account must be reported right away, and similarly, any illegal credits must be reported to your demat account right away. This is because the account holding statement is a solid and comprehensive record of shareholdings and transactions made by you over a specific time.
Moreover, it indicates that the statement may either be invalid or that there is a major problem with the transfer of securities, in case your holding statement displays zero transactions or any unauthorised transactions. In such cases, you need to report it to the DP right away.
Takeaway
Long story short, your Demat account holding statement summarises all the shares you own in your Demat account, their current value, and the dates they were bought. To ensure that the shares you bought have actually been moved to your demat account, you need to check your demat account holding statement regularly.
In case you do not find it there, it means it got stuck in the system. Note that the holding statement for your demat account proves that you are the owner of the shares.
However, no matter what stocks you invest in, and what transactions your demat account statement holds, it is advisable to select a trusted financial partner when beginning your stock market investing journey.
Even if you don’t have much knowledge about a demat account, they will help you with the basics, let you know about the documents required for demat account, and so much more.