BUSINESS

5 Ways to Keep Your Demat Account Safe

As the popularity of stock trading is increasing day by day, the need to open the best Demat account in India is also increasing. Since having a Demat account is mandatory for stock-based transactions, many Depository Participants (DPs) offer account opening services to investors. Though the recent advancements in technology have made Demat account opening process quite easy and fast, its safety and security is still challenging for most investors. Let’s checkout the ways to keep your demat account safe that we have listed below.

In today’s digital age, when people have been openly embracing digital payments due to the attached convenience. Though it is an easy way to do financial transactions, this also poses high level of threat to frauds. Even if you choose to invest in any upcoming IPO in India, there are certain steps that must be taken from an investor’s end to ensure optimum safety and security of his account. This is why it becomes necessary for an investors to ensure that his demat account remains safe from fraudsters. This is why all the top brokers in India advise investors to pay careful attention to their Demat account.

If you are one of those investors who are wary of the importance of your Demat account and want to keep it safe from fraudsters and cyber criminals, this post is meant for you. There are hundreds of websites out on the internet that provide easy tips on how to keep your Demat account safe. You can just visit them and take necessary steps in that direction. 

However, for your reference, we have highlighted some proven Demat account safety tips below. 

  1. Use the DIS slip

The DIS (Debit Instruction Slip) document that you get is of supreme importance and it is advised to take the best care of it. It could prove vital in ensuring the security of your Demat account. You can consider its value as that of your saving account’s cheque book even though you don’t need it every time you do an online transaction. According to domain experts, investors are advised not to put signed copies of DIS slip at random places or with their Depository Participant.

In some cases, stock traders put a singed DIS booklet with their depository participants of brokers to save both effort and time that go in signing the slip. However, this is something you must need to avoid to reduce your exposure to prevailing threats. 

  1. Keep a detailed record of the Demat account statement

All the transactions that are done under a Demat Account can be checked by account statement. If you have opened the best demat account in India, the demat account provider will send you statements at regular intervals. A majority of Depository Participants furnish such statement on a monthly or weekly basis and sometimes daily.

  • Check your statement and verifies all the admittances and the eventual balance. Do not ignore such statements for longer periods and make it a habit to check them every time you get them.
  • If you prefer to check your Demat account statements on web as per your convenience and don’t want to get the physical copies of the same, don’t ignore the statement as it is very crucial. 
  • Ensure that the kind of shares, their quantity, and corresponding values are precise and best to your understanding.
  • Inform your Depository Participant instantly if you notice any errors in the statement of it has any kind of discrepancy.
  1. Change the accessibility of PoA document

The PoA (Power of Attorney) document is a paper than the account holders need to sign when they open a Demat Account. The document is used by the brokers to initiate the PoA to buy, sell or transfer shares if the entitled investor is absent. If you are also consulting a broker who carry this privilege as per the PoA, it is better to add some restrictions and control the access that he can use. In this type of case, he will only be able to take any action once you give your consent for that activity.

  1. Verify the truthfulness and reliability of your DP

Finding and confirming the trustworthiness of your DP is one important activity that must be pursued when you open a Demat Account. Don’t forget to check the background of your DP, online reviews and other details before opening the account.

  1. Make sure to freeze your account before stop using it

Whether you are moving to a new country or you want to keep yourself away from stock trading for a few days, it is strongly advised to freeze all your running Demat Accounts. It is quite common among stock investors to their demat accounts abandoned and active. This is not a good practice and tends to attract fraudsters.

Some more safety tips

  • Always update your contact number and email address with your DP and inform him in the case of any change
  • Do not tell your login ID and password to anybody.
  • Use strong password to access your Demat account and keep it different from the passwords you use on other platforms.
  • Try to change the login password more often. 
  • Keep yourself abreast of the latest account safety measures 

Always keep in mind that it is entirely up to you and your account usage practices that define the safety and security your Demat account. Even if you are working with one of the top brokers in India, make sure to work on your level to make sure that your account remains safe from harmful elements. 

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