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Demat Account Tips: Demat account gives amazing facility, even if there is no money in the account you can buy shares..

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To invest in the stock market, mutual funds, or government securities and bonds, it is necessary to have a Demat Account. If you also invest then you must have created a demat account. But, do you know that a Demat account provides the facility of investment even without money? Shocked, but it is 100 percent true. Even if you have only Rs 10 thousand in your demat account, you can get the facility to invest up to Rs 1 lakh. What is this facility and how can it be availed, we tell you the complete process of it.

Every demat account gives its investor the option of leverage trading. Under this, the investor can invest 10 times more than the amount deposited in his account. The benefit from this will be that when the market goes up, you will get a chance to earn more profits. There is also risk in this, because if the market falls then your loss will also increase. Well, there is profit and loss in the stock market, but now we will talk about how you can avail of this facility.

What is leverage trading?

Investors can do leverage or margin trading through a Demat account. It allows the investor to borrow funds from his broker. You can use this fund to buy stocks or securities. The advantage of this will be that you can take more positions than the money deposited in your account and you will also get more profits when the market rises. However, there is still a risk of huge losses if the market crashes. You can also use it in the future and option trading.

How much money can I get?

Generally, your broker can give you a loan up to 10 times the amount kept in the demat account. Suppose you have Rs 10,000 in your demat account, then the brokerage can give you the facility to trade up to Rs 1 lakh. You can buy shares by taking money from the broker and earn huge profits by selling them when the market rises. To avail of this facility you just have to contact your brokerage. Zerodha brokerage house can give you leverage up to 5 times. Kotak Securities can give you leverage up to 20 times.

Is interest charged on leverage?

When we say that you can buy shares, securities, or cryptocurrencies by taking leverage i.e. loan from a broker, the first thing that comes to mind is interest. But, you will be surprised to know that most of the brokerage houses do not charge any interest or commission on leverage. This simply means that you can avail of such a facility without paying any additional interest.

What will be the benefit to brokerage?

It is not that if the brokerage is lending you money without interest or commission then it will not get any benefit. The brokerage gets transaction fees on every transaction you make. Look at the benefit of brokerage in this way, if you trade only at Rs 10 thousand then the brokerage will get a transaction charge on this amount, but if you have borrowed Rs 90 thousand and now you are doing transactions at Rs 1 lakh then the brokerage house will also get a transaction charge of Rs 1 lakh. Transaction fees will be paid on trading. That too on both buying and selling. This means that you are paying transaction fees of Rs 2 lakh and this is the advantage of the brokerage house. Most brokerage houses including Zerodha and Angel Broking charge Rs 20 plus GST on every transaction.

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