A dematerialized account or demat account allows investors and traders to invest in stock market securities. Making the process of buying, selling, and holding securities easy and hassle-free, the demat account stores the shares in an electronic format. Moreover, investors can open demat account and securely invest in stock market securities due to the presence of necessary security protocols. However, with an increase in demat accounts and rapid digitization, the chances of getting a hand or duped by fraudsters have increased exponentially. Investors must make themselves aware of various aspects that can help them to protect their demat account from any external fraud. Some tips have been mentioned below.
- Using a secure demat account password
Available in the form of an electronic trading application, a demat account can be easily accessed through a mobile-based application that can be downloaded on smart devices like phones and tablets. Investors must secure their demat account by using a strong password to protect their smart devices and demat account from external use, hacks, and frauds.
- Use of a two-factor authentication
Modern trading applications are embedded with a two-factor authentication that uses various modes for user identification. These include the use of one-time passwords or OTP which the users must input to access their demat account. Investors receive a one-time password on their smart devices, official email addresses, and personal mobile numbers which they can use to authenticate their identity. This, in turn, protects their demat account from unwanted access.
- Use of secured and authorized trading applications
Modern private companies with their trading application have their security features and protocols. Investors must opt for their trading apps which are authorised and secure. Moreover, investors must refrain from using official training applications and platforms to access their demat accounts. The use of a secure personal connection is recommended.
- Regular monitoring
Investors must access and monitor their demat accounts regularly to identify unwanted or unauthorized transactions. Users must even regularly examine their demat account reports and financial accounts as well to prevent any fraud. Regular monitoring allows investors to track their investments and buy and sell transactions which are essential to prevent frauds.
- Keeping oneself updated about new security features
Investors must even keep themselves updated about the new security features, fraud prevention techniques, and security measures made available by the makers of their trading platform and SEBI. One must watch videos and tutorials and access news articles to understand ways to prevent financial fraud. Various online guidelines are available as well to secure a demat account that users must read and understand completely.
Conclusion
Investors must even appoint a dependable nominee, freeze their used bank accounts and even keep their personal information completely confidential. The use of a reliable and trusted share market app is recommended as well. Demat account-based frauds can be prevented if users make themselves aware of the different security protocols and apply the same. However, in case of actual fraud, investors must take the assistance of customer support and complaint redressal teams assigned by their brokerage companies.