Best Ways To Protect Your Demat Account From Fraud And Hacks

In order to buy shares on the stock market, it’s mandatory for investors to have a ‘Demat account’, also known as a Dematerialised account. The shares purchased by investors are stored in their Demat accounts and these accounts also enable online trading. Investors can store stocks, government securities, mutual funds, bonds, and ETFs on the Demat account. However, as the number of online transactions grows, the risk for frauds, scams and hacks also goes up. Many people who are not very technically savvy may find themselves targeted by scammers or hackers who are looking to steal funds out of their Demat accounts. While stock markets and stockbrokers are constantly updating their systems to maintain the best security, there are some fundamental security measures that you can also implement to ensure that your Demat account does not fall victim to fraud or hacks.

You can use the following safety tips to keep your Demat account secure against hacks, frauds, other scams:

Use A Powerful Password

While this is a very basic cybersecurity tip, it’s incredibly important in keeping your Demat account secure. The more longer and more complex password that you have for your Demat account, the harder will it be for hackers or fraudsters to hack into your account. Ensure that you add symbols and numbers into your password and avoid using any personal info in your password like your name, birthday, names of family members or pets, etc.

Choose Your Stockbroker Carefully

Over the past few years, many new stockbroking services have propped up. However, as a vigilant investor, it’s your responsibility to ensure that you do not choose any ill-reputed or lesser known stockbroking services that might put your funds or Demat account at risk. You should do your due diligence and only choose to go with an established and well-reputed stockbroker with a consistent history of excellent service.

Lock Your Demat Account If You Are Moving Abroad

If you are going to be moving abroad, you should contact your stockbroker and get your Demat account locked till you get back. Doing this will ensure that nobody else would be able to access your account or the securities stored on it while you are away from the country. Many people often forget about their Demat accounts when visiting abroad and they can end up getting hacked.

Do Not Write Down Your Password

While having a strong password is important, it’s also important to remeber that you must not write down your password or store it in a place where it’s publicly accessible. If you keep your password written down or stored online on cloud or in any software or app, the risk of your password getting leaked or stolen increases. The best way to ensure nobody ever finds out your password is to memorise it perfectly without writing it down. One more thing you can do to enhance security is change your passwords at a regular interval.

Regularly Examine Your Demat Transactions

In order to keep careful tabs on your Demat account, you should carefully check all the transactions carried out through the account on a regular basis. You should keep a careful eye on all the SMS notifications you receive related to your Demat account. This will ensure that you can verify all the transactions that are carried out on your account are actually initiated by you. If you notice any transaction that you did not initiate, you can quickly change your password and contact your stockbroker about the issue.

Protect Your Debit Instruction Slips

Your Demat account’s Debit Instruction Slip (DIS) is a kind of like your bank chequebook. In order to prevent frauds, you must ensure that you do not leave your signed Debit Instruction Slip with your broker or anyone else.