If you have an interest in the stock market or you want to invest in the stock market then the initial step you need to open a Demat account. Demat Account is simple as a bank account that holds your securities, bonds, equity, and NFT in electronic form. In other words, Demat means Dematerialised.
The government of India introduced Demat Account in 1996 in National Stock Exchange NSE, for seamless performance and to reduce the risk of theft and paperwork. In the modern era, youngsters can easily access the stock market through their Demat accounts. In this blog, we can see the benefits of having a Demat account In India.
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History Of Demat Account
Before the Demat Account system, investors can hold their shares on paper, and if they lost or damaged their share papers they can’t able to sell their securities.
So, the Indian government passed a law for the National Securities Depositary Limited NSDL and the Central Security Depositary Limited CSDL to dematerialize the securities in 1996.
The implementation of the Demat account is the best revolutionary system in the Indian Stock Market history.
Benefits Of Demat Account
Having a Demat Account is the best option for traders and investors, here is the list of benefits of Demat Accounts.
Assurance Of Security
While comparing the physical certificate Demate account is the safest method to hold your securities. You can easily manage your account and shares in any place with the help of the internet. There is no way to lose your documents while using to Demat account.
Avoid Theft and Forgery
There will be a high chance of losing your physical document or anyone can forgery your documents when it’s in paper form. If there is any disaster the papers may damage or disappear. So Demat account provides you with the whole solution to your securities.
Cost Effective
The main advantage of having a demat account it’s cost-effective when compared with physical securities and bonds. If you want to Open a demat account Online you can avoid the stamp charges and other handling fees on the traditional method. There are many stockbrokers providing discount Demat account to investors.
Easy To Access
If the company delivers Dividend to your stocks using a Demat account you can transfer your money into your bank account. Demat accounts provide multiple investment options. And you can check the updated share results with the help of the Demat account.
Easy Loan Access
If you have a Demat account with its securities you can easily get a loan from any private or national bank in India.
Multiple Investment Options
With the help of a Demat account, you can buy or sell shares or stocks, bonds, ETFs, and many investing options. Using a Demat account you can take advantage of smart investment.
Conclusion
Demat accounts make revolutionaries in the Indian Stock market, with the help of a Demat account you can easily access your shares with updates, and easily settle into your bank account. More importantly, Demat Account highly secures your shares, bonds, ETFs, and securities.
FAQ
Can a person have multiple Demat Accounts?
Yes, as per the SEBI guidelines, any person can have multiple Demat Accounts in India.
Is Demat Account Free?
In, India some of the stockbrokers are providing free Demat accounts like Zerodha, and Angle One.
Also Read: What Is Demat Account & Its Fundamentals