What are the most crucial advantages of having a DEMAT account?

What are the most crucial advantages of having a DEMAT account?

Several Indians are very much interested to indulge in the trading of stocks which is the main reason that they need to open the DEMAT account to avail all these kinds of services very easily. The very first step towards Indulging in stock market share trading is to open DEMAT account so that people can fulfil their overall purposes in a much-streamlined manner. Understanding the different kinds of perks of DEMAT accounts will always allow people to have a good understanding of the whole process.

 It is very much important for people to be clear about several kinds of technical terms like brokerage firms, financial institutions, depository participants and several other kinds of things. Also, the DEMAT account is known as the DEMATerialised account in which physical shares and securities will be purchased and will be converted or DEMATerialised to be kept in the electronic format. This is considered to be similar to the bank account but it will be only utilised for making the sale or purchase of the number of shares in terms of debt or credit it from the account. 

Following are the classes of securities that the people can include in their DEMAT account:

  1. Initial public offerings
  2. Mutual funds
  3. Nonconvertible debentures
  4. Shares or stocks
  5. Government bonds

 Following are the most important advantages of having the DEMAT account:

  • The DEMAT account is always based upon very good easy accessibility in the whole process because people can very easily monitor everything through their smartphone, laptop or tablet which will always allow them to make the right decisions.
  • DEMAT account is based upon easy DEMATerialisation and re-materialisation of the securities so that people can very easily indulge in proper conversion by instructing the depository participant.
  • With the help of opening a DEMAT account, there will be a very good amount of safety in the whole process because the share certificates will never be kept in physical form and will never become prone to any kind of damage or theft.
  • The DEMAT account is considered to be the best possible mitigation against all these kinds of risks so that people can have trust and confidence elements in the whole process.
  • DEMAT accounts will always allow people to keep the securities in electronic format so that online trading can be undertaken very easily. In this way, people will be very easily engaged in the whole process and will ensure that overall goals will be efficiently achieved.
  • The process of carrying out different kinds of transactions with also become very much easy with the help of this particular system and the best part is that every transaction can be processed with a click of the mouse without any kind of problem. The shares will be easily reflected into the DEMAT account within two days.

 As per the regulations of SEBI, there will be no stamp duty of the transfer of securities which will be into the electronic format which is another ad on the advantage of the DEMAT account.

 Hence, it becomes very much imperative for the people to open a DEMAT account with the help of 5paisa alongside the bank account so that they can take advantage of share market very efficiently. 

John Norwood
John Norwood is best known as a technology journalist, currently at Ziddu where he focuses on tech startups, companies, and products.