You need a demat account to keep your shares and therefore, it is only fair to ask about its safety. With the rise in online hacking and fraudulent cases, can demat account be hacked is a very common question that comes to everyone’s mind.
But is it actually possible?
Yes, your demat account can be hacked and it entirely depends on the stockbroker you choose. With the emergence of so many DPs (stockbrokers) in the industry, reliability plays a key role. Not every stockbroker is 100% secure and some of them prioritize other things over safety.
On top of that, online trading is not 100% full-proof as there are certainly other ways you can lose all your shares that you kept in your demat account.
Let’s look at all the things you should avoid in order to keep your money safe.
PoA (Power of Attorney)
- the investor and the stockbroker sign this document.
- It gives the stockbroker the authority to sell the shares on behalf of the investor.
The whole idea behind the introduction of PoA was to make the transaction process easier. However, in some cases, the stockbrokers sometimes can unfairly sell the shares without the consent of the shareholders.
Again, it depends on the credibility of the stockbroker. A less credible DP has higher chances of misusing the PoA than a largely credible one.
Online fraudulence
Online fraudulence is one way how someone can lose their stocks.
A demat account comes with Login credentials like Username, Password, and other security questions and if someone can get a hand on this confidential information, they can do whatever they want to do with your stored shares.
- Henceforth, make sure you keep all this information to yourself and do not share it with anyone but your trusted ones.
- You can also keep changing the password regularly, beginning with changing the initial system-generated password you get when you open the demat account.
- You can also sign-up for the SMS and email alerts so that your DP notifies you about all the transactions and you can track the doubtful ones.
- What you can also do is sign in and check the account details on a regular basis.
Therefore, make sure you pick a trustworthy stockbroker, stay attentive and never drop your guard.
We hope we cleared your confusion and helped you know better about keeping your demat account safe. Feel free to drop more such questions in the comments.
