There has been a revolution in the way we invest and all the credit goes to technological innovations. The investment process is no more tedious and has been made extremely convenient since the introduction of demat accounts. For those who are not aware, a demat account is an online platform that facilitates online trading and stores all your holdings. It was introduced in India in 1996 and has since provided a plethora of benefits to both companies and investors. The icing on the cake is that it’s very easy to open a demat account online as well.
Demat accounts help investors hold shares and securities in electronic form. The process of converting your physical certificates into electronic format is known as dematerialisation. Conversely, you can also rematerialize your securities i.e. reconvert them back to tangible documents. If you have a demat account, then all your share certificates will be easily accessible at all times. For doing this, all you require is a smart device that can be connected to the internet. You also have the convenience of settling trades electronically with just a few clicks.
A demat account functions like a bank account. This is to make it easy for customers to operate without facing any complications. Your shares will be stored safely in the same manner as your bank deposits. Imagine all your transactions being recorded and entered into a passbook. That’s exactly what your demat account will do except that a passbook in this case is redundant as all your transactions will be monitored online. This allows all your electronic data to be shielded by multiple security barriers, making it impossible for miscreants to penetrate into your account. Here are 5 demat account benefits that everybody should know:
Carefully storing and maintaining your physical certificates can prove to be a headache. Also, keeping track of their performance is an additional burden. But, with the help of demat account investors can keep an eye on their investments and maintain them through a single account.
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As previously mentioned, your physical securities are prone to damages, losses and thefts. These risks are completely wiped out if you opt for a demat account. Maintaining your holdings in electronic form is also extremely convenient.
Before demat accounts were introduced, investors could buy and sell only in restricted quantities. The facility of dealing with single security or odd lots was unknown. But, thanks to demat accounts, shareholders can now trade without any restrictions.
There are a variety of costs associated with physical holdings like stamp duty, handling charges and other expenses. But, if you open a demat account you won’t have to deal with any of these additional expenses.
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Due to the redundancy of paperwork in demat accounts, the time taken for executing a transaction is significantly lower. This helps shareholders buy and sell within a shorter period of time and with great efficiency.
Now that you’re aware of its benefits, go ahead and open your demat account online today.