With market-linked investments becoming increasingly accessible for investors, the number of demat accounts being opened in India is constantly on an upward trajectory. There are several advantages of the dematerialisation of financial assets, ranging from increased security, higher transparency, ease of monitoring, and reduced transaction costs.
Dematerialisation does, however, have its fair share of risks as well. In this article, we shall delve into some key steps you can take to ensure the safety of your demat account and the securities contained therein.
Ten Tips to Keep your Demat Account Safe
Your Demat account is the digital repository where the magic of dematerialisation comes to fruition. Not only can you spare yourself the hassle of safely storing share/ debenture certificates, but you can also enjoy a greater degree of flexibility in selling your financial assets. It is pivotal to keep your demat account safe and here are ten effective tips to do that.
1. Open A Demat Account With A Credible Depository Participant
You must open demat account with a credible depository participant/stockbroker. It is easy to assess and compare various authorised DPs offering dematerialisation services, and you must be mindful to choose one that has a positive track record with regard to compliance and transparency.
2. Set A Strong Password For Your Demat Account
Once you have opened your demat account, you must set a strong and distinct password for accessing it. The more unique the password, the better. By setting a strong password, you can take a huge stride in protecting your demat account from unauthorised access.
3. Enable Two-Factor Authentication For Your Demat Account
To make your demat account even more secure, you can add two-factor authentication to it. This way, the access to the account shall be guarded by an additional level of security through a One Time Password (OTP) sent to your registered email address and mobile number.
Even if your demat account password is compromised, the two factor authentication shall prevent undue access to the account.
4. Access Your Demat Account Only Through Official Portals
You must practise safe browsing to access your demat account. It is advisable to use the official trading platform of the relevant stock broker to access the account. Before closing the mobile application or web browser, you must remember to sign out of the account.
5. Keep Your Communication Details Updated In The Demat Account
Another important step you can take to increase the safety of your demat account is keep your correspondence details (email address and phone number) updated in the profile section of the account. This way, you shall receive all the pertinent information and alerts associated with the demat account on a timely basis.
6. Access Your Demat Account On A Regular Basis
In order to ensure that your demat account is in order, you must log in to the account and check it on a periodic basis. Even if you are not regularly engaged in trading, it is critical to check your demat account, portfolio, and profile details every now and then.
7. Never Share Your Demat Account Login Information With Anyone
The user ID and password to your demat account are the lock and key to your investment portfolio. As such, it is critical to keep the login credentials confidential. You should neither write down those details nor share them with anyone.
8. Never Respond To Any Suspicious Emails Or Texts Vis-A-Vis Your Demat Account
Should you receive any email or message related to your demat account, particularly suspicious emails/ messages, you must check the sender’s email address. You must not click on any links or download any documents or pictures enslosed with such emails. Furthermore, you must inform your depository participant about such fraudulent correspondence.
9. Check Your Demat Account Statement For Any Discrepancies
Your depository participant is legally mandated to share your demat account statement on a periodic basis (weekly or monthly). When you receive that statement, you must meticulously peruse it and identify discrepancies, if any. Should there be any discrepancies or unauthorised transactions, you must reach out to your DP immediately and intimate them about the same.
10. Do Not Leave Idle Balance In The Linked Trading Account
Another key measure to protect your demat account is to never keep idle funds in the linked trading account. If you do not intend to purchase more securities in the near future, you must transfer said balance to your bank account. This way, the securities held in a state of dematerialisation in the demat account are likely to remain safe.
To Sum it Up
By following some easy and actionable steps, you can easily secure your demat account and prevent unauthorised access to it. The higher the degree of your alertness vis-a-vis your demat account, the safer it can be from fraudulent access and usage.
