5 Amazing Benefits of Demat Account in Trading

By | October 1, 2021

The world is moving towards a tech future at a fast pace. Till a few years ago, one could not imagine the impact technology has created on our lives today. Banking, personal investments and share trading are also transformed.

Anyone who has been a long term investor would recall holding large piles of shares carefully. Many prudent investors used to leave behind shares as inheritance for their children. The next generation often runs pillar to post to collate, transfer and sell these physical shares. Many of these shares are often delisted. Some of these share certificates are lost or suffer damage over the years and the hard earned money is gone.

Demat account is a solution that simplifies the process of share investing and trading.

A demat account is an online account where shares, mutual funds, govt bonds and debentures can be held in electronic or dematerialised form.

There are many benefits of a demat account and demat trading:

  • Easy Access: Shares held in electronic account can be accessed from anywhere just like a bank account.
  • Safety: Shares in demat form are held safely and the chances of shares being misplaced or lost is zero. In paper form, securities often can get damaged in floods, fire or can get stolen. Paper over the year tears off but demat securities are held in complete security.
  • Fraud Prevention: Shares in physical form are prone to fraudulent transactions or forgery but in electronic form your investments are secure and protected.
  • No Stamp Duty: Shares in paperless form do not bear stamp duty nor does the transfer of shares bears this expense. Also there ae no handling charges that investor has to bear for paper form. Hence you save money every time you invest, sell or trade securities multiple times. There is a nominal fee for holding a demat account and brokerage.

  • Easy Transaction: Shares in paper form require a long time for physical transfer after buying and selling often a month. However, in electronic form they can be traded immediately.
  • Quick Turnaround: There is no need to fill any form or sign any papers to buy and sell dematerialised shares. Even mutual funds can easily be bought sold using a demat account.
  • Easy Receipt of Funds: After the sale of shares in electronic form, money is quickly realised and it is directly credited to the linked bank account. One need not wait for the physical papers to be signed, transaction executed and then funds to be received.
  • Direct Credit: Bonus shares, dividend, interest and refunds are directly credited into the demat account without the need to follow up with the issuer. With physical securities one had to keep track of physical credit of interest refunds etc. through cheques or demand drafts.
  • Odd Lots: With physical securities one had to trade in specific lot size of shares but with demat trading one can trade in any quantity and lot size. Even a single share can be bought and sold easily.
  • Easy Tracking: You can easily monitor the value of your investments and portfolio using a demat account. You need not manually maintain any record or track the value of shares every day. The demat and trading account shows the value of your stocks live through an app or web portal.
  • Loans: Demat Account helps you not just invest and grow your money but also helps you avail loans. Securities in demat form can be pledged as collateral for loans. The process is easier due to online mode.
  • Borderless World: Demat trading allows you to invest from anywhere in the world. NRIs can invest in Indian markets using demat trading facility. Similarly, even if you are travelling, you can track, trade and invest from anywhere.

A trading account can be opened along with a demat account to buy and sell securities at the exchange online. The trading account is linked to your demat account and a bank account. The shares bought and sold are immediately posted in demat and funds are credited in the linked bank account as per the settlement cycle.  There is no need to personally visit a brokerage and place instructions.

Demat share trading and future trading has made investing in shares very simple, secure and easy. Open a demat and share trading account today and grow your money with smart investments at the click of a button. To open an account please contact us at___________.

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