What is a Demat Account?
of stock markets has changed drastically after the introduction of technology. Long
ago, the Bombay Stock Exchange use to run on floor trading system. With
technological advancements, the system has completely changed. The amount of
paper work has reduced significantly leading to no time wastage to issue share
certificates to the shareholders. Instead, the shares are now issued to the
shareholders in electronic form via the demat
account. In this article, we shall understand
the meaning of demat account and understand its concept.
What is Demat Account?
account is an account in which the dematerialised securities are stored and
held. Dematerialisation is the process of conversion of physical shares
certificates into electronic form. In
simple words, holding of securities in electronic form is possible through a demat account or dematerialised account. Every
investor is allotted a separate unique id with their broker under which their
securities can be held.
have a look at the benefits of demat account.
Benefits of Demat Account
Demat account has the following benefit:
· It leads to automatic updation of the transactions with the company. Therefore,
it eliminates the need to give details like address again and again for
· It saves cost, as no stamp
duty needs to be paid. Earlier, stamp duty was charged on every security transfer.
· Maintaining and managing
securities in the demat account is much
easier than holding them in paper form
like share certificate.
· The problem of odd lots that
existed earlier is no more there. Now shares can be transacted in any odd lot
numbers as per the desire of the investor.
· The delivery risks like forge
shares, theft of share certificates, wrong deliveries have been eliminated with
the introduction of demat account. Once a trade is executed, it is
automatically reflected in the demat account.
· Demat account is not only meant
for shares. Other instruments like bonds, etc. can also be held in a single
advancements have had a positive impact on the stock markets. Now the transaction in securities can be done with just a single click. There are many
brokerage houses in the market with whom demat account can be opened.
Securities is one of the top most financial service providers. By opening a
demat account with us, you get the facilities to trade and invest in stock
markets at low brokerage rates. We guide our clients in the IPO
application process. You can trade using
our mobile application. We provide regular stock recommendations to the clients
using stock analysis tools. To open a demat account with us or for any query,
reach us via call or email.