The Demat Accout helps you to access your funds with ease and offers security from theft and mishandling. The working of Demat accounts is quite similar for the investors in the share market. Demat account is the first step for the stock investment. In this article we will discuss about why investor require to open demat account?
Demat account primary purpose is to hold the securities in electronic form. The Demat account stands for dematerialised account. This account holds the shares that are bought and dematerialised (converted from physical to electronic shares). This helps in making the trading experience easy for the investors.
What is a Demat account?
A Demat account or dematerialised account provides the facility for holding shares and securities in electronic format. When a trader trades the securities held in Demat Accounts. In short, this is to facilitate the trade for the investors and traders. Moreover, a Demat account holds the investments an individual makes in shares, government securities, exchange-traded funds, bonds and mutual funds in one place. You can read our article about the top 10 best demat account in India so that you can choose the best out of them.
What is dematerialisation?
Before heading to the benefits of a Demat account and why an investor should have an account it is important to know about dematerialisation. The conversion of physical share into electronic form is called Dematerialisation of Securities. The process makes it much easier to maintain and access documents from anywhere throughout the world.
Reasons Why Investor Require to Open Demat Account
- A Demat account provides the digital security and convenience to hold the shares and securities.
- This helps in eliminating any kind of theft, forgery, loss and damage of physical certificates.
- Using a Demat account you can easily transfer the securities immediately.
- Once the trade gets approved the securities are transferred to the Demat account.
- Also, bonuses, mergers, etc., that you get through your shares is transfer into your account.
- One can easily trade Intraday, future and option and other segments in the stock market.
Moreover, the account information regarding the activities is available online you can get it by visiting the website. One can trade on the go using a smartphone or a laptop, you don’t have to visit the stock exchange. There are additional benefits like the reduce brokerage charges because there is no stamp duty involved with the transfer of shares. These are features and the benefits that come with a Demat account and moreover encourage a larger trade volume by investors. This moreover increases the potential for great returns.
Demat makes the handling of the stock easier; moreover, now the Indian exchanges follow the settlement cycle of T+2 days that is facilitated by the Demat account. In this you have to pay the seller on the second day of buying shares following the settlement cycle, and your Demat account gets automatically credited with the purchased securities. The account has made the process for trading seamless and hassle-free.
Benefits of Demat account
- Seamless and faster transaction of the shares.
- This helps in facilitating the digital secured storing of the securities
- This also eliminates theft, forgery, loss and damage of security certificates
- You can easily track trading activities.
- Access anytime and anywhere
- You can add the beneficiaries
- Automatic credit of the bonus stocks, rights issues, split shares
Conclusion – why investor require to open demat account?
In conclusion the article covers why investor require to open demat account. Without a Demat account, one cannot invest in the share market. If you want to know about “how to open a Demat account online” read the article.