Demat Account

Globalization and technology have made the world smaller in so many ways. Banking and trading have become even easier thanks to the arrival of the internet. In the past ten years or so, the share market has advanced in the direction of electronic trading. And everyone who has been even remotely associated with the equity market would have heard of Demat Accounts.

The notion of a Demat Account was introduced in the year 1996. Before this when digitalization was not a standard,shares and securities were kept, issued and traded in physical form. During that time, traders had to experience plenty of issues for protecting the shares from burglary, theft, harm or some other sort of misfortune.

The introduction of Demat Account was not only a relief for the traders, but it also gave a boost to the stock market. One of the most important benefits of Demat account or Demterialised Account is that it permits traders and investors to save their shares and securities in electronic format. Due to this, the whole procedure of investing, holding, monitoring, and trading, becomes faster, convenient, and cost-efficient.

Demat Accounts were introduced for easy management & maintenance of shares and securities. However, with time, it kept on adding to the ease of trading and holding investments. There are various other benefits of Demat Account, mentioned in the list below are a few of them:

1. Lower Risks

Physical securities are dangerous because of thefts, misfortunes, or harms. Furthermore, terrible conveyances or phony securities present further dangers. These dangers are totally disposed of with the opening of a Demat account, which gives holders the alternative of holding every one of their interests in electronic format.

2. Reduced Costs

Due to the absence of physical securities, a Demat account is free of several additional costs like stamp duty charges, handling charges, and other such expenses. These reduced charges make Demat account much more beneficial and cost efficient for the investors and traders.

3. Less time consuming

Demat Account eliminates paperwork from the entire process of buying and selling securities, which in return makes the transactions more efficient than before.

4. Operate using a single account

Demat Account gives you the option to hold and track all your investments using a single account. It eliminates the need to open multiple accounts for buying NCDs, tax-free bonds, etc. Tracking the performance of your portfolio is also easy via Demat Accounts.

5. Seamless process

Demat Account combined with internet banking makes the entire process of trading extremely convenient and hassle-free. After you purchase shares in your trading account, your bank account automatically debits, and afterward, your Demat account credits without your involvement and vice versa when you sell the shares.

6. Odd Lots

With physical certificates, purchasing and selling were conceivable just in the predefined amounts.The comfort of managing odd lots or single security was likewise not accessible. Demat accounts eliminate this issue entirely.

7. Easy termination of account

To shut the account, you have to present an application with the DP. Furthermore, return all unused delivery instruction slips and take care of all the obligations. Keep in mind, a Demat account can shut just if there are no shares in it.

For investors, who used to be in trouble with piles of stock certificates, a Demat account has become an inevitability. Not having a depository or Demat account has now become the biggest hindrance to investing in equities. It is no big surprise that an ever increasing number of entities are moving to the dematerialized type of trading.

Having a Demat account gives you the chance to participate in the trade involving various asset classes. Many investors have difficulty investing in the market because they do not have one. It is about time you get one as well. And if you are keen on sorting your finances, there are multiple options to choose from. It is time to let your investment journey begin!

By Punit