Financial literacy has actually accelerated in recent years due to many awareness
programmes by the government and several other parties. Monitoring your SMS messages
and making sure your phone SIM is secure are crucial parts of protecting your Demat
account. As a result, several Demat accounts were opened. Now the new age generation
mostly aware about the process of how to find best demat account.
The convenience offered by online purchase and sale of shares has really appealed to
novice investors. However, this has also provided scammers a chance to carry out their
criminal activities. Furthermore, the post-pandemic era witnessed a significant surge in
investments from small and retail investors.
Tips to protect your Demat Accounts from fraud and
Despite the fact that the threat cannot be eliminated, several actions can guarantee a high
level of protection and safety. Here is a discussion of a few of these measures:
1. Use TPIN to authorise transactions
Transaction Personal Identification Number (TPIN), a unique four-digit number required to
authorise transactions in a Demat account, is what the acronym stands for. It aids in
granting a broker permission to debit the selected stock from a Demat account. The Demat
Power of Attorney substitute is often referred to as TPIN.
2. Never record your login information on paper
Despite being a pretty obvious fact, many people still overlook it. Login information must be
kept in mind and should not be written down or documented anywhere. It should not be
distributed to others, either. Also, always log in through a secure network.
3. Constantly use password protection
Using a secure password is obvious. Actually, the majority of accounts now have a two-
factor password protection function, which increases security. Keep incredibly strong
passwords, though, as con artists are usually one step ahead. It is wise and advised to
change the password frequently.
4. Keep transaction records for cross-checking
It should be standard practice to keep track of recent transactions and compare them to the
electronic contract notes. This account reconciliation will reveal any missing transactions.
This can be brought up right away with the Demat firm so that something can be done about
5. Examine the Brokerage Company
Even though trading apps are handy, they can also lead to some common mistakes. To be a pro trader, you should stay away from these problems:
The number of brokerage businesses is growing daily as stock trading becomes more and
more popular with the general population. Before making a decision, it is essential to carry
out a thorough analysis of the company, gathering details regarding its history, performance
history, reputation, and market credibility.
It is also critical to verify that the broker is not involved in any proprietary trading. If the
corporation engages in proprietary trading, you should avoid creating a Demat account since
there may be a conflict of interest that would be detrimental to your interests. Brokerage
companies must be properly checked in order to prevent fraud.
6. Monitor the Power of Attorney of your broker
Brokers who get the PoA (Power of Attorney) from their clients can access Demat accounts.
The country’s expanding Demat-related frauds are seriously threatened by these POAs. A
general-purpose agreement might have been used to transfer the sale of funds before the
new rule, but it cannot be done now.
When you sign a Power of Attorney with your broker, demand a restricted purpose PoA. This
is so that brokers can sell or transfer funds or securities without the investor's consent. This
process significantly increases your safety. Except for unpaid dues, the PoA may be
cancelled at any time and without notice.
7. Protect your debit instruction slip (DIS) booklet
The Debit Instruction Slip (DIS) booklet for the Demat account functions similarly to your
bank chequebook. Before moving your shares between Demat accounts, you must sign the
DIS. You must make sure that you don't leave your signed DIS booklet with your broker or
anyplace else in order to prevent fraud.
There are several ways in which Demat account frauds might occur. However, by following
some simple safety measures, you may significantly lower the chances. Use a password and
TPIN, protect your DIS slip, and also keep a record of transactions. While Demat accounts
are often considered secure, it's essential to remain alert to protect your hard-earned money.
So, it is always advised to trade in the share market using a trusted trading app. Several
firms in India are well-known for their authenticity. BlinkX is one such app facilitating safe
and secure transactions while trading online. All your personal and financial data is stored in
safe servers. In addition, you get the TPIN to authenticate your orders. Always use it to keep
your account safe.