As an investor, you may have heard about DEMAT accounts and how they make investment tracking easy. If you are wondering what they are, read along this article so we can make it easy for you to understand them better.
A Demat account, also known as a dematerialized account, is a digital form of storing your investments in shares. It makes it easy for you to access your investments, buy and sell shares, as well as transfer them from one person to another without paying any commission or fees. It gives you complete control over your investments by keeping them safe from physical theft or loss through fire or flood damage. A demat account also allows investors to hold their securities electronically rather than physically. This is a great convenience for investors who want to use their brokerage accounts as a place to keep track of all their investments and trade them quickly.
Investment in shares, bonds, mutual funds, and securities involved a lot of paperwork back in the day. To eliminate the paperwork, the Government of India implemented the Demat Account system for NSE trades in 1996.
There is no paperwork these days, and physical certificates are no longer issued. So, when you purchase shares, all you get is an electronic entry in your Demat Account.
Now that you know what a DEMAT account is, let us explain why it is important to get one for yourself.
- A Demat account stores your shares in digital format.
A Demat account allows you to store your shares in digital format. It’s more secure, easier to buy and sell shares, and requires less paperwork. You don’t have to worry about physical certificates or having them mailed back to you if they’re lost or stolen.
- All securities are held in their electronic or dematerialised form.
All securities are held in their electronic or dematerialised form.
An electronic form is called a dematerialised form, and it’s stored on a central depository (also known as a “demat” server). The shares that were once held physically in the hands of investors can now be accessed from anywhere through your internet browser at any time, even while you are traveling abroad.
- It is mandatory to have a Demat account to invest in shares.
It is mandatory to have a DEMAT account to invest in shares. You cannot buy shares without one, and you cannot sell your shares without taking out the money from your DEMAT account.
There are many types of AMCs that offer their services online as well as offline.
- A Demat account is beneficial to investors because it makes it easy to buy, store and transfer shares.
A Demat account is beneficial to investors because it makes it easy to buy, store, and transfer shares. It’s also easy to maintain, as you don’t need to go through an Asset Management Company or trading platform in order to do so. The government has provided all the necessary information on how one can open a demat account online or offline.
In addition, this type of investment vehicle provides benefits such as:
- Easy access – Investors don’t need an account at any particular bank or financial institution; they can simply open one at any time using their own computer. No further paperwork is required either! This means that anyone with internet access can easily invest in shares without needing any special skills or knowledge about investing in stocks/shares themselves (though there may be some fine print).
- Your shares are safe with a Demat account.
As a shareholder, you can check the status of your shares at any time. You can also download the certificates for all your holdings from the website and get information about them.
- You can access your Demat account online anytime, anywhere.
You can access your account from anywhere. You can buy and sell shares online, check the value of your holdings, transfer money between accounts and even transfer funds to other banks if there are no restrictions on doing so.
- It is convenient to hold your investments in one Demat account instead of multiple brokerage accounts.
- It is easier to manage your investments.
- You can keep track of your holdings in one place, which helps you make better investment decisions.
- You can easily see the performance of your portfolio at a glance—and compare it with other investors’ performances as well!
- And if you want to sell securities or transfer funds between accounts, all transactions are processed through Demat accounts.
- There is a low cost associated with opening and maintaining a Demat account.
There are a few ways to open a Demat account. You can open a Demat account through an expert or directly with your bank itself. You can open a Demat account through various Registered Depository Participants.
You need to find someone who finds you the best deal on the exchange rate, and who also offers other services like placing trades, etc., while banks have their own online portals where they provide this service only to their customers.
There are no setup fees or maintenance fees associated with opening an account, but there is an annual fee which may vary depending on your choice of banks or financial experts.
- A Demat account will make it easier to invest and trade shares.
A Demat account will make it easier for you to invest and trade shares. You can buy, sell and transfer shares from anywhere in the world using your Demat account. This means that you can access your account 24/7 from any device, including mobile phones and tablets!
It’s also easy to make payments with a Demat account – there are no fees associated with making purchases or withdrawals via bank transfer or cheque payments.
A Demat account is a good option for investors because it makes it easier to invest and trade shares. You can keep your investments in one place with a Demat account instead of multiple brokerage accounts. It is also convenient to hold your investments in one Demat account instead of multiple brokerage accounts because you only need to open one account.
Make the best out of your DEMAT accounts with expert financial aid and assistance. Contact us to manage your investments the right way.
