We can see 70 percent of Indians having a bank account such as savings and current account. They are unaware of the benefits of having a Demat Account. According to the data, there were 38.4 million Demat accounts in India as of 2018. When you consider that over 80% of the Indian population has a savings or current account, it’s easy to see how Demat accounts fall short. One of the most important advantages of a Demat account is that it makes trading easier. Opening a Demat Account is the first step toward stock trading.
Know about the Advantages of having a Demat account :
Electronic book entries are used in the Depository System to record ownership and transfer of securities. Shares, NCDs, and other debt securities can be purchased and held in a Demat account. They can use the account in the same way that they would a bank account, with the following benefits and security features:
- On securities transfers, there is no stamp duty.
- Transfer of securities in a timely and efficient manner.
- ‘Bad Deliveries’ are no longer available.
- Loss, theft, mutilation, and other forms of risk are eliminated.
- Corporate benefits, such as bonuses, rights, and dividends, are settled and disbursed more quickly.
- Mismatches in bank accounts and addresses are no longer an issue.
- Convenient nomination facilities.
- In the event of a holder’s death, the formalities of transmission are made as simple as possible.
- TDS is not deducted from Demat securities.
- Demat account information and statements are sent to customers regularly.
Some benefits of having a Demat account
1. Easy access: You can monitor your investments using your smartphone, tablet, or laptop by logging into your online Demat Account.
2. Security dematerialization and rematerialization are simple: Any security can be easily converted from its physical form to an electronic format (dematerialization). They can be converted back to their physical form if necessary (rematerialization). All you have to do now is instruct your DP.
3. Helps you open a trading account: While a Demat Account allows you to keep securities such as stocks in an electronic format, an online Trading Account allows you to trade through the same account. In other words, you can use your online Trading Account to buy or sell securities. You must always quote your Demat Account number when trading in the stock market through a trading account.
4. Transactions are simple to complete:
To buy or sell shares, you do not need to go to a company’s physical office. Your transactions will be processed with a single mouse click. If you’re buying stock, once you place an order, the stock will appear in your account.
Even if they have a strong desire to invest in stocks and bonds, many people are unaware of the accounts required to begin stock trading. Understanding the many benefits of Demat accounts may be able to help you get back on track. For equity delivery trading, 5paisa charges zero brokerage; for equity intraday trading, the lowest brokerage is charged.