A Savings Account safeguards your money, lets you quickly access it, and provides security from theft, loss, etc. Similarly, a Demat Account is a crucial tool for investors and digitally ensures the safekeeping of their shares and securities. This makes trading convenient and enables them to build and grow their wealth.
In India, it is crucial to have a Demat Account if you are interested in investing in the stock market. So, before you start your trading journey, ensure that you open a Demat Account:
Overview of Demat Account
A Demat or a Dematerialised Account makes it easier for people to electronically hold Exchange-Traded Funds, shares, government securities, and Bonds. Earlier, shares had to be held and stored physically as share certificates. This made the trading process cumbersome and risky. Therefore, to eliminate such problems, the National Securities Depository Limited introduced a Demat Account.
This account lets investors store their shares and securities digitally, making the trading process quick and convenient.
What is dematerialisation?
Dematerialisation refers to the conversion of physical share certificates into electronic format. Earlier, physical certificates made it difficult for investors to store and transfer the shares. However, dematerialisation has made it easier for investors to hold their shares, Bonds, etc., in a safe place and access them anytime, anywhere.
Benefits
Some important advantages of Demat Account opening include the following:
Ensures safekeeping
Earlier, shares were held physically as paper certificates and were prone to theft, loss, tampering, etc. This made their safekeeping tedious. It has also shortened the transfer process, leading to errors and delays. However, today, with the introduction of a Demat Account, you can store all your shares and securities electronically in a safe repository.
Trade in volumes
A Demat Account lets you digitally store more than a single share. Hence, it enables you to trade volumes and easily monitor all the details.
Quick transfer
When you open a Demat Account, you quicken the trading process for shares. Having this account also ensures that you can transfer the shares easily and swiftly when trading online.
Stores more than shares
Besides shares, a Demat Account also serves as storage for various assets like government securities, Mutual Funds, Bonds, etc.
Enjoy easy access
You can easily access this account anytime from your home or work. This lets you keep a tab on all your securities and shares from anywhere using a laptop, desktop, tablet, or smartphone.
Get updates automatically
Any changes in the initiative of a particular company whose shares you might be holding in your Demat Account, resulting in changes to its stocks, automatically get updated in your account.
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