Great advance with stock Market
Benefits Of Demat Accounts
Trading in the shares of the Company is now compulsorily under the demat form. With
SEBI making demat form mandatory on most of the traded scrip, electronic transfer
will be the only way everyone will trade. No stamp duty is required for transfer
of securities in the electronic form. In case of transfer of physical shares, stamp
duty of 0.5 percent is payable on the market value of shares being transferred.
All risks associated with physical certificates such as delays, loss in transit,
theft, mutilation, bad deliveries etc eliminated. If you wish your shares can be
kept in the “Frozen Mode” by your Depository Participant under your specific instructions.
The concept of an “odd lot” in respect of dematerialized shares stands abolished
since in the demat mode market lot is now one share only Dematerialised securities
are most preferred by banks and other financiers for providing credit facility against
securities. Generally, demat securities attract lower margin and lower rates of
interest compared to physical securities. Even in the electronic mode of trading,
the payment mechanism (usually through a broker) between the buyer and seller continues
to be as before. Also the usual brokerage charges would have to be incurred. However,
after the settlement, pay in and pay out are on the same day for scripless trading
which means you get your securities as well as cash immediately.
Shares bought or sold are transferred in your name on the very next day of pay out.
In case of physical shares, transfer of ownership takes 30 days or sometimes even
more. No courier / postal charges for sending share certificates / transfer deeds.
Facility for freezing / locking of investor accounts, which enables you to make
your account non-operational, for instance if you are abroad. Facility to pledge
and hypothecate your securities available. As the Depository System becomes popular,
brokers will be increasingly reluctant to deal with physical shares. Investors prefer
to buy shares which are already in dematerialized form.