In today’s digital era, having a Demat account online for trading is so convenient. A Demat account holds your shares, bonds, ETFs, mutual funds without any requirement of physical certificates or documents. Also, having a Demat and Trading account allows transferring securities and funds seamlessly. Nowadays, most of stockbrokers offer paperless and free demat account online.
However, with instances of fraud increasing over the years, the safety of your Demat account is so essential. Here are some ways that you should follow to keep your Demat and trading account safe.
Keep Minimum Account Balance
Today, with the help of online transfer/UPI, you can add funds from your Savings account anytime for trading. Instead of keeping unattended cash, it is advisable to keep minimum funds in your account.
Keep Track of Your Transactions
For every transaction in your trading account, you receive an SMS alert in your registered mobile number and an email in your registered email address. Check your balance immediately when you trade to keep track of your transactions. Also, cross-verify your monthly transaction statement so that you can keep your account safe.
Sign A Limited Power of Attorney
The Power of Attorney (POA) gives the authority to a broker to represent or act on behalf of a trader. So, when you sign the POA, with your Broker, insist on signing a limited purpose POA rather than a general one. Doing so will allow your Broker to debit limited shares only.
Inform Your Broker About Any Changes
If you change your mobile phone number, you should immediately inform your Broker. Otherwise, the Debit imitations might go to your old contact number and you may not be even aware of it.
Freeze Your Account When Not in Use
If you are not going to use your account for a long time, don’t block your account. Instead, give a signed application to your broker and ask them to freeze the Demat account. Once your Demat account is frozen, there will be no transactions in your account. Also, you will continue to receive corporate actions like Dividends, Bonus and Splits.
Keep No Delivery Instruction Slips with Broker
Don’t keep a signed delivery instruction slip (DIS) with your Broker. Your DIS is a signed document that can be misused, like, it can be used to transfer shares to another Demat account. So, avoid keeping signed delivery instruction slips with your Broker.
Conclusion
A Demat account can help you to trade at your convenience. Though every Broker assures the safety and security of your brokerage account, it is also your responsibility to be careful and keep your account safe. So, follow the above steps to ensure the safety of your account.
In case you notice any fraudulent activity on your account, you can file a complaint with your Broker as soon as possible. You can register your complaint online or talk to the support team. If you do not hear from your Broker, you can raise the issue with the Exchange Office at ignse@nse.co.in or register your complaint on the SEBI website at scores.gov.in to escalate your issue.
