June 2024

Know The Importance Of Having A Demat Account


In order to start trading with shares/stocks you need to mandatorily have a Demat account. Here are the key reasons why you need a Demat account?

So, before we start knowing about the reasons of having a Demat Account let us know what exactly is a Demat account?

What is a Demat Account?

A demat account is an account that allows the investors to hold, monitor or transact shares and securities in a convenient and easy manner. This account holds the securities in the electronic form instead of physical form thereby providing ease while trading. Demat account has now become a necessary thing if one wants to start investing in markets.

Now let us see why it is important to open a Demat account. American Sign Letters

Easier And Safer To Store– Initially when the demat account wasn’t available the shares/securities needed to be stored in physical form. Storing it in physical form needed extra care as the risks of it getting misplaced, or stolen was always there. Keeping the stocks in electronic form helped with tackling these issues and also keeping it safe. Moreover, the demat account comes with extra layer of securities with statutory regulations and compliances thereby making it a safer option.

Mandatory For Trading Purposes- Demat account is a mandate to trade in the stock market. Since trading now days is done electronically, having a demat account cannot be an option. Without a demat account selling and buying of the shares won’t be possible.

All Under One Roof- Keeping a separate record for all the asset classes such as equity funds, debt funds would be extremely confusing. With demat account one can keep all the shares/securities in one account. This helps in accountability of the shares and also track them regularly.

Flexibility Of Access- A demat account can be operated from anywhere with any device, whether a computer, tab or smartphone. One can buy and sell the shares from anywhere and from any place. This doesn’t restrict a person to sit in front of the computer and do the trading, one can indulge in trading even when on a holiday or on move.

Helps To Manage Odd Lots– Initially with physical certificates one would not be able to sell odd lots of shares and needed to deal with specified quantities. With the introduction of demat account one can sell or buy just one share also if he wished to.

Eliminating Additional Costs– Back then with physical shares one would have to pay additional costs for stamp duty and handling charges. These charges are no more applicable after the introduction of demat account thereby reducing the trading costs and also increasing the savings considerably.

Apart from the above benefits, it also eliminates the need to visit the broker physically every time one needs to buy or sell a share. These visits have been eliminated after Demataccount was introduced. Also, electronically dealing with shares eliminates the chances of manual errors like shares transferred in some other’s name, or error in the number of shares transacted.

These benefits of Demat account is not enough unless you have your own sharing experience. If you have well researched about the markets and wish to start with your trading, then get a demat account instantly and enjoy care free trading.

Leave a Reply

Your email address will not be published. Required fields are marked *