How to Reactivate your Trading account ?

Introduction

A number of issues concerning trading accounts have been exposed by the scandal at Karvy stockbroking. This isn't the first time that trading account has been misused by people with malicious intent. The indian government has been working hard to tighten guidelines and rules relating to trading accounts to prevent mishaps from happening. Let's now take a look at your trading account, its purpose, and, most importantly, how to reactivate it whenever you need.

Difference between a Demat account or trading .

You have probably never been taught the difference between a Demat and trading account if you have ever opened a Demat account through a digital Depository participant (DP). This distinction is crucial in determining if you want to open a trading account.

A Demat account holds the equity you buy, but a trading account facilitates your interactions with the stock exchange: where you can purchase and sell stocks. A Demat account could be thought of as a wallet. The trading account is your slip to get to the counter to make your payments. This facility is more commonly known as a 2 in 1' offer. It is based on the assumption you want to purchase and sell shares. Naturally, one will naturally ask, "Well, can I only have a Demat account and not a trading account?" Technically, the answer is yes. Technically, yes. To sell shares you'll need a trading account.

Why am I required to reactivate my trading accounts ?

This is due to the above events and the government's response by tightening trading account restrictions. If there is no trading activity through the trading account, it will be declared dormant. The broker could have previously set this period. This time period is now standardized at one year, according to the new rules. The DP must mark a trading account as inactive if it does not receive any activity for more than a year.

You might want to reactivate the Demat account if you are interested in trading on the stock market following a hiatus. You may also want to close your account. Your trading account has been rendered inactive. To close it, you will need to clear all outstanding transactions fees and other dues. Before you can do any of the above, you must activate your trading account. Dormant demat trading accounts can be used by scammers to hide their illegal activities in the stock exchange. It is a good idea to reactivate and close the trading account even if you don't intend to use it. This will save you and others lots of trouble. If you are in a situation in which you have opened multiple trading and Demat accounts, but they continue to accrue AMC charges, you may want to consider how to reactivate trading account to close them.

Reactivating your trading accounts .

Demat accounts can accumulate fees over time which you will need to pay before you can reactivate it. Trading accounts, however, don't have this problem. There are some steps you need to follow.

To reactivate a trading accounts, the KYC process must be completed again. Although this KYC process is possible online, In-Person Verification is required. In some cases, however, it has been allowed to conduct the IPV process over webcams, particularly in light of the recent covid 19 pandemic. However, certain protocols must be followed.

Although the specific process for activating trading accounts varies depending on the DP of the customer, the basic principles remain the same. Customer must inform their DP they want to reactivate their trading accounts. This can be done by sending a letter to company head office or using any digital alternatives if provided by broker. Most likely, copies of identification such as PAN or Aadhar cards will be required.

Conclusion

Trading can be a thrilling and exciting world. We feel the need for every opportunity. Experiential traders will tell us that the goal is to maximize every opportunity, which in turn makes your investment process more efficient. To maintain simplicity and lower costs, you can reactivate or close any trading accounts linked to Demat accounts. To reactivate your dormant account and get back into equity trading, you will need to follow the above steps.