The demat account was essentially considered an account used by those involved in share marketing. Also known as the dematerialized account, demat accounts manage and hold one’s shares. These accounts are linked to an individual’s bank account. However, most of us are unaware of the string of benefit these accounts offer to its users.
But before discussing the advantages, we must consider why these demat accounts are so significant in nature and why every Indian must possess a demat account by perhaps giving a short description on its definition.
As discussed above, in general, a demat account is a trading account where you manage the stocks you purchase, hold and sell them through this account. This account is a trading account and is basically used for trading purposes. Since 1996, SEBI i.e. Securities and Exchange Board of India, made it mandatory to hold a demat account so you can actively participate in stock exchange process of the stock market.
We shall now discuss the various merits of having a demat account as follows:
First of all demat account facilitates easy transactions and administering your portfolio gets convenient and easy. The transactions process becomes hassle-free and in today’s busy world who wouldn’t want that? With a demat account you are not imposed by the law of trading within your geographical barrier, hence, you can invest in any stock of your preference. There is also no restriction on the quantity of stocks you want to exchange. You also save on stamp duty as you transact online, have reduced paper work, perhaps, making it really easy and reliable.
Apart from that you must also be aware of the types of stocks you can hold in your demat account, they are, stocks, mutual funds, gold, bonds, IPO, and NCD.
Rajeev Enterprises is a share broker in Delhi and we have a host of complete range of financial advisory. For further details on how to open and manage a demat account, contact us.