By Levi Luke
Demat Account
A Demat account is an electronic account that holds shares and securities in electronic form. It has become an essential requirement for investors who wish to invest in the Indian stock market. Here are some of the benefits of having a Demat account:
Safe and Secure
The primary benefit of having a Demat account is that it is safe and secure. Physical share certificates can be lost, stolen, or damaged. With a Demat account, the risk of loss or damage to share certificates is eliminated. The shares are held in electronic form, which means that they are safe and secure. Know more about what is demat account.
Easy to Maintain
Maintaining a Demat account is much easier than maintaining physical share certificates. With a Demat account, you can access your account online and check your holdings, transactions, and other details. You can also receive electronic statements and alerts, which make it easier to keep track of your investments.
Cost Effective
Trading in the Indian stock market involves a lot of paperwork and administrative work. With a Demat account, the paperwork is eliminated, which makes the process much more cost-effective. There are no stamp duty charges on transactions done through a Demat account.
Faster Settlement
Physical share certificates need to be transferred from one person to another physically, which means that settlement can take time. With a Demat account, the transfer of shares is done electronically, which makes the settlement process much faster. The shares are credited to the account on the same day as the transaction. Know more about what is demat account?
No Restriction on Quantity
With physical share certificates, there is a limit on the number of shares that can be held in a single certificate. With a Demat account, there is no restriction on the quantity of shares that can be held. This means that investors can hold a large number of shares in a single account, which makes it easier to manage their investments.
Easy to Transfer Shares
Transferring shares from one person to another is much easier with a Demat account. The transfer can be done electronically, which eliminates the need for physical share certificates to be transferred. This makes the process faster, easier, and more efficient. Know more about what is demat account?
Avail Corporate Benefits
Investors who hold shares in electronic form are eligible for corporate benefits such as dividends, bonus shares, and rights issues. These benefits are credited directly to the investor’s account, which eliminates the need for physical share certificates to be submitted.
Convenient for NRI Investors
For Non-Resident Indians (NRIs), holding physical share certificates can be a challenge. With a Demat account, the shares can be held in electronic form, which makes it easier for NRIs to manage their investments in India. Know more about what is demat account?
Thus having a Demat account offers a lot of benefits to investors. It is safe, secure, cost-effective, and easy to maintain. It also offers faster settlement, no restriction on quantity, easy transfer of shares, and corporate benefits. For investors who wish to invest in the Indian stock market, a Demat account is an essential requirement.
