‘Dematerialisation,’ or ‘Demat account,’ is a digital safe for your stock holdings. Your shares are kept electronically in this account rather than on paper certificates. Demat accounts are meant to protect your shares by lowering the possibility of loss or fraud. A Demat account is used for electronic share keeping, whereas a trading account is required to quickly execute buy and sell orders. These two accounts are essential for participating in stock market trading. Read the article below to understand the importance of Demat account opening.
Importance of Demat Account
The Demat account’s shares remain secure and are easily transferable when needed. You can trade directly in the stock market and actively participate in exchanges using online platforms if you trade online. It took a lot of time and effort for investors to make share market investments before the introduction of Demat accounts. The procedure involved hiring and consulting a broker to find the best offers, manually completing all necessary paperwork for the purchase, and then waiting for the physical certificate of shares to be delivered.
The importance of a Demat account is explained below:
-
With their ease of use and speedy share transfers, Demat accounts help in the removal of trade obstacles. You are not required to execute deals through brokers or sub-brokers. Shares in the Demat account can be pledged as security for a bank personal loan.
-
There is no need to physically deliver the share certificates to the bank. The majority of banks provide loans ranging from 1 lakh to 25 lakhs secured by shares in the Demat account.
-
The agreements between you and the Depository Participant are free of stamp duty if you have a Demat account. As a result, transactions and registration expenses are reduced.
-
Using a Demat account does not impose any restrictions on location or security. There are several ways to access the account that can be done online. This enables the buying, selling, and monitoring of shares from any location.
Conclusion
Regarding the relevance and significance of the Demat account, it is a hassle-free and essential tool for improved financial planning. The process of opening a Demat account is also made simpler. Demat accounts are available to both minors and adults. At your convenience, you can open your account offline or online. Simple steps like choosing the right broker, completing an account opening form and KYC documents, and finally finishing the verification procedure is involved in opening a Demat account. Platforms like Yes Securities offer a Demat account process hassle-free and secure. Platforms like these provide security to their users.