What’s a Demat Account ?

A demat account or dematerialised account is an account which lets investors to hold shares in a digital form. A depository is similar to a bank. A demat account consists of certificates of financial tools like shares, bonds, government securities, mutual funds etc. It involves the process of converting physical shares into electronic form for easy access and trading. It enables you to digitally buy and sell shares on the stock market, without having to exchange physical share certificates and paperwork. According to the guidelines provided by SEBI, the Transfer of shares in physical form stopped from April 1, 2019.

Why you should have a demat account

Simplicity of investing in the equity market without hassle of holding shares in physical form is one of the main features of Demat accounts. As stocks are held in electronic format there is no fear of physical damage to share certificates or theft. 

Advantages/Benefits of a Demat account

• Cutting down of costs, such as handling expenses, stamp duty, safety etc. which is involved in physical securities
• No paperwork since securities held in electronic form
• Electronic credit of all corporate action of the respective company directly to your Demat Account (Bonus/splits/mergers) or to the linked bank account (Dividends, etc.)
• Account can be opened under Basic Service Demat Account Facility 
• No risk, as it is the Secure and convenient way to keep track of shares
• Quick Settlement
• Time-Saving as electronic format is instant
• Zero Storage Risk –It removes the threat of theft, forgery, fake certificates, non-delivery, etc.