Demat account, why do you need it?

Demat accounts were actually introduced in India in 1996. Before this, shares and securities were physically traded with. The importance of opening a free demat account is pretty understated. It allows the investors to hold securities electronically in the Best Demat account in India, making the entire process of investing, from monitoring to holding to then trading, much more convenient, faster and also cost efficient in nature.

What are the benefits of a demat account?

  • Lower risks. Physical securities are really risky because there is a constant fear of thefts, damages or losses. In addition, the bad deliveries pose more risks. When you have a demat account, these risks get completely eliminated which gives the holder an option to make sure all their investments are held in an electronic form.
  • Easier holding opportunities. Maintaining physical certificates of all the holdings can be a very difficult job. What is even more difficult is keeping a constant track of how they perform. When we talk about demat account holders now, we see how convenient it is to hold and then track all their investments with the help of one single account.
  • When it comes to physical certificates, the buying and the selling is only possible with the help of specified quantities. There’s a particular kind of convience now when you deal with single security and odd lots. This wasn’t there before. Demat accounts have made all this possible and more.
  • Reduction in costs. When you go the physical paper route, you will incur numerous charges in the form of stamp duty, extra handling charges and numerous other expenses.  When it comes to demat accounts, these expenses are completely eradicated.
  • Reduced amount of time. When paperwork is eliminated, what you get is time, time and more time. The reduced time requirement makes the account holder invest more, making more sales and purchases of numerous security holdings within a short span of time and with great efficiency.
  • Demat accounts are not just lucrative, they are also fuss free which is the most important thing for people nowadays.

Why is a demat account so important?

  • The entire conversion process of physical securities to an electronic form, completely depends on you. This is because an investor is actually allowed to hold the securities in both electronic or physical form. However, you need to keep in mind that monitoring these physical certificates is way more difficult as compared to the dematerialised ones.
  • It is also very difficult to buy and sell securities in its complete physical form. The number of agents you need to help you deal in the physical shares and the number of people who are willing to buy the physical shares is very little in comparison to individuals who deal in dematerialised securities.
  • You get to transfer shares easily. Investors can transfer their holdings easily with the help of a delivery instruction slip or receipt instruction slip for buying and selling shares equally. These kind of slips allow the users to provide for all the details that are required to execute a smooth transaction.

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