How to Avoid Demat Account Frauds

Demat account is the primary requirement to trade and invest in the Indian financial markets. All the buying and selling of shares or securities is possible only with the help of the demat account. However, when it comes to the safety of the demat account there might be many doubts in the mind of an investor.

When you purchase precious metals like gold or silver you have the option of keeping them safe at home or bank locker. Likewisewhen it comes to safeguarding the valuable assets held in the demat account, you deserve the same degree of safety.

In this article, we will list down certain ways through which you can avoid frauds in the demat account.

Ways to Safeguard Your Demat Account

• If you are trading with the online demat account, do not forget to take the basic precautions. Keep your user name, account ID, password and other details of the account confidential.
• While keeping the password for online demat account, do not use obvious codes like your date of birth, name, marriage anniversary, etc. as your password. Make sure you change the password at regular intervals.
• Avoid using your online demat account from unsecured Wi-Fi or cyber cafes.
• You must be careful while using the delivery instruction slip (DIS). Make sure that the slip book is under your safe custody. Do not ever leave your DIS booklet with the broker or advisor.
• To avoid frauds, make sure that the DIS is pre-stamped and has unique serial id.
• Make sure you check your transaction and holding statements regularly. If any discrepancy is noticed, it must be immediately brought to the notice of the broker. Similarly, for online demat transactions, request to receive the contract notes on your email id. By regularly monitoring the contract notes you protect yourself from any fraud in the demat account.
• Opt for a SMS facility from your brokerin order to stay updatedregarding any transaction that is carried out in your demat account.
• When you purchase shares in the demat account they must get credited by T+2 date. However, many times the brokers leave the shares in the pool account so that they can be used for leveraged trading positions. As an investor, you must try to avoid this situation and wait for T+2 days for the shares to comes in the demat account. This leaves no scope for confusion.
• To avoid any unauthorised access to your demat account, you can keep it in safe custody. This precaution must be taken when you would not be using the demat account for a long time or you are going abroad for few months.
• You have the option to freeze the demat account. This measure can be taken when you suspect any suspicious activity in your demat account. After freezing the demat account, whenever need be, you can approach the market regulators and the exchange to unfreeze your account.

The above mentioned are a few measures to avoid demat account frauds. Another way to avoid frauds is by opening the demat account with a reputed and trustworthy broker. Kotak Securities is one of the most ethical and reputed broking firms. Opening a demat account with them is safe and secure. They abide by the SEBI guidelines and ensures that customers do not face any problems or frauds. Whether you are a beginner or seasoned investor, you can consider opening the demat account with them.

Safety of the holdings in the demat account must be your priority. A broker like Kotak Securities protects and safeguards your investments like no other broking firm in India.