Tips to protect your Demat account from Fraudulent activities

Written by Updated on 23 May, 2024

Tips to Protect Your Demat Account from Fraudulent Activities


    

Technology and the internet have revolutionised nearly every aspect of our lives, providing convenience and simplicity for various tasks like booking tickets, making payments, and accessing information. However, as we embrace online platforms for activities such as opening a Demat Account and investing in financial securities, it's important to recognise that this increased reliance on technology also introduces potential risks to our financial well-being.

While a Demat Account is mandatory to hold ETFs, bonds, mutual funds, stocks and other securities, it is also prone to the risk of fraudulent activities. Let’s explore how to protect your Demat Accounts from fraud.

Ways to Ensure the Security of Your Demat Account

Here are a few simple steps that can minimise the risk of fraudulent activities with your Demat Account:

  • Choose a Reliable Depository Participant

Ensure that the DP you choose is registered with the relevant regulatory authorities, such as the Securities and Exchange Board of India (SEBI). Regulatory watch over the broking platforms helps ensure that the DP operates in accordance with the prescribed guidelines and follows best practices for security and investor protection.

  • Strengthen Your Password and PIN

You must set a unique password and PIN to keep your Demat Account protected from unauthorised access. The password you set is the key to all your stocks and treasured securities in the Demat Account. Therefore, this password should not be easy to guess. Use a combination of alphabets, numbers, and symbols to restrict fraudsters from accessing your account. You can also change it frequently to keep it unique and confidential.

  • Enable Two-Factor Authentication (2FA)

Two-factor authentication (2FA) is a security measure that requires users to provide two forms of identification to access their account. It adds an extra layer of security that protects your Demat Account from illicit access. Demat Account holders must enable 2FA to protect their accounts with a password or PIN and OTP. It helps protect your account even if your password gets compromised.

  • Regularly Monitor Your Demat Account

Maintaining vigilance is the best tip to keep your Demat Account protected. Carefully review your trading account statements and the SMS you receive from the depository on the performed transactions. Compare them with your trading activities and identify any anomalies instantly. If you notice any anomalies, it is crucial to immediately report them to your broker or the relevant authorities for prompt investigation and resolution. Keep your email Ids and mobile number updated with the depository to receive notifications without any delay.

  • Be Wary of Phishing and Social Engineering Attacks

A social engineering attack occurs when someone uses social skills to obtain your personal and financial information. The attacker seems reliable and a representative of an authorised entity. A phishing attack occurs when the attacker poses as a trustworthy organisation to obtain your personal information through a malicious website or email. Exercise caution and never share sensitive information such as OTP (One-Time Passwords) or other crucial details with anyone, as they could be used in phishing and social engineering attacks.     .

  • Keep Your Devices Secure

Most Demat Account holders save their usernames and passwords on their devices to operate their accounts. It saves them from entering these details whenever they want to log in. That means if an unauthorised person gets access to your device, they can easily conduct transactions without your knowledge. So, keep your device secure with a lock screen password. Also, keeping an app PIN is essential. Doing that will prevent anyone from using your device, even if your device gets lost or stolen.

Axis Direct: Your Safest Investing Partner

Axis Direct is your trusted and safest investing partner. With our robust security measures, advanced technology, and regulatory compliance, we prioritise the safety of your investments. Rest assured, as you trade and invest with us, know we have your back. Open a 3-IN-1 Trading, Demat and Savings Account with Axis Direct for a secure and worry-free investing experience.

Conclusion

Fraudulent activities with a Demat Account may happen. However, if you know how to protect a Demat Account using the tips we mentioned, you can safeguard your account against fraud and keep your holdings safe.

Disclaimer: While these tips aim to enhance the security of your Demat account, no method can guarantee absolute protection. Stay vigilant, exercise caution, and consult with professionals for personalised advice.