Keep your demat account safe from fraud with these 6 tips

As cybercriminals develop more sophisticated methods to breach digital systems, a secure demat account ensures your investments and personal details stay safe. Moreover, robust security measures can prevent unauthorised access, thus protecting your investment portfolio from potential identity theft and financial losses.

Read on to understand six effective tips to keep your demat account safe from fraud.

1. Use unique and strong passwords

The first step to safeguarding your demat account is to use a unique and strong password. A password must be difficult to guess and must not contain easily accessible personal details such as your name, date of birth, or phone number. Instead, go for a complicated password that includes a combination of lowercase letters, uppercase letters, numbers, and special characters.

For example, a password like "S!pC@lc2024#" is far more secure than “SIP321”. It is important to update your password regularly, particularly if you access your account frequently. Many use the same password across distinct platforms, which is a risky practice. Note that your demat account holds essential financial details, so never share your password with anyone, and make sure it is unique to that particular account. 

2. Allow two-factor authentication (2FA)

In today’s digital era, two-factor authentication has become a standard security feature, particularly when it comes to protecting financial accounts like your demat account. Two-factor authentication adds a security layer beyond just your password.

After adding your password, you will be required to provide a one-time password (OTP) sent to your registered email or mobile number. This infers that even if a fraudster obtains your password, they cannot access your account without the OTP, which is unique to you and valid for a limited time.

Most depositories and brokers offer a 2FA as a security feature, ensuring your account is doubly secure. Always make sure you have activated 2FA on your demat account and associated platforms, particularly when dealing with online investments.  

3. Keep your personal information updated

Maintaining up-to-date personal details in your demat account is important. Your registered mobile number and email address must be current because all crucial updates, transaction alerts, and OTPs are sent to these. If you change your email or phone number, inform your depository participant (DP) instantly to avoid missing crucial notifications.

Keeping your contact information up to date helps you remain informed regarding any activities on your account, particularly if there is an unauthorised or unusual transaction. For instance, if you are using an online SIP calculator to plan for your mutual fund investments, you will get updates and reports on your registered details.

Any delay or discrepancy in receiving these notifications might point to potential fraud, and prompt action can save you from financial loss.  

4. Periodically monitor your account

Frequently monitoring the transactions in your demat account is an imperative way to spot unauthorised or suspicious activity early on. Periodically check your account statements and transaction history. Most depositories send monthly statements through SMS or email, so make it a habit to assess these carefully. Look for any unusual trades or unauthorised debits.

By assessing your demat account transactions, you can even ensure your investments, including your SIPs, are proceeding as planned. If you notice any transactions that you did not authorise, immediately contact your DP or broker to investigate and correct the issue.  

5. Be wary of phishing scams

Phishing scams are popular techniques used by fraudsters to steal sensitive details like your demat account login credentials. These scammers often send emails or SMS messages pretending to be from your depository, broker, or bank. They might ask you to click on a link or download an attachment to “secure” your account or “verify” your details. However, these links result in fraudulent websites designed to capture your personal information.

To avoid falling victim to phishing scams, never click on suspicious links or open attachments from unknown sources. Always access your demat account by typing the broker or depository’s official site URL directly into your browser. These precautions stand even when using financial tools like an online SIP calculator. Make sure you are visiting legitimate sites to safeguard your personal and financial information from theft.  

6. Log out after every session

It is crucial to log out from your demat account after every session, particularly if you are accessing it from a public or shared device. Just closing the browser window does not end the session, as someone else could reopen the window to access your account. Properly logging out ensures that no one else can access your account post you have completed your session.

Even if you are using your device, logging out adds a layer of security. This practice is crucial not just for your demat account but also mutual fund tracking apps. Keeping your sessions secure is just as essential as using strong passwords and enabling two-factor authentication.  

Ending note

Keeping your demat account safe from fraud is crucial in the present digital age. By following the above-mentioned six tips – using strong passwords, allowing two-factor authentication, keeping your details updated, monitoring your account periodically, being cautious of phishing scams, and logging out after every session – you can considerably lower the risk of fraud.

Whether you are managing your stocks or using an online SIP calculator to track mutual fund investments, these proactive measures will help you safeguard your financial assets. So, always ensure to stay alert and stay safe!

(This article is part of DMCL Consumer Connect Initiative, a paid publication programme. DMCL claims no editorial involvement and assumes no responsibility, liability or claims for any errors or omissions in the content of the article. The DMCL Editorial team is not responsible for this content.)