Features and Benefits of Opening a Demat Account

Features and Benefits of Opening a Demat Account

A Demat account also called a “Dematerialized account”, helps all users store their financial securities like bonds and shares in an electronic format.
The function of the Demat account is similar to another bank account. The only primary difference between a savings bank account and a Demat account is bank account holds the money electronically while a Demat account is used to hold all the owned shares and other securities electronically.
Demat account is the best way to use it for trading, investing, holding and other procedures of online trading in the stock market.
It helps all the investors to buy and sell shares, stocks, mutual funds, government securities without any paperwork required.

There are several essential features of a Demat account that help several users to make their financial transactions easier:

  • Easy Share Transfers
  • Users can easily transfer their shares in no time with the help of a Demat account. Therefore, having a Demat account makes the whole process easier and much faster.
    In addition, transferring the securities from one Demat account to another can be done through delivery instruction slip (DIS) or receipt instruction slip (RIS).
    Both these slips will allow users to fill in all the relevant and necessary details for carrying out a transaction in a smooth manner.

  • Freezing Demat Account
  • The Demat Account holder has the power to freeze the particular type or quantity of securities in a Demat account.
    They also have the right to choose to freeze their Demat account for a specific period of time. By freezing, it will stop the transfer of money from any Credit or Debit cards into a specific Demat account.

  • Easy Dematerialization of Securities
  • If an investor is holding its certificates in physical form, they have to provide detailed instructions to the depository participant (DP) to convert them into an electronic form.
    Similarly, if an investor is holding its certificates in electronic form, it can be easily converted into physical form by requesting it.

  • Instant Access
  • The major benefit of having a Demat account is that it gives quick and easy access to all their investment and statements with the help of net banking.
    Also, these details can be easily accessible through a smartphone, computer or any other electronic device anywhere.

  • Receiving Benefits and Stock Dividends
  • The introduction of the Demat account has benefitted several users a lot. It is because they have replaced the time-consuming process with simple and easy methods to receive interest, funds or dividends.
    Those funds or dividends are automatically credited to the Demat account. When it comes to updating the investor’s account, with bonus issues, stock splits, public issues, the process of a Demat account is extremely convenient because it is done through an electronic clearing service (ECS).

  • Globalizing India
  • Demat Accounts have played a vital role in giving a chance to foreign investors to get instant and easy access to the Indian Stock Market. Also, the significant rise in foreign money in the stock market has helped the users and the Indian economy.

  • Reduced Time
  • The Demat account has helped the users to eliminate the time required in completing a single transaction. The time reduction helps the account holder make additional purchases and sells security holding with a lot more efficiency and in a shorter time.
    In today's time, the Demat account has become a primary thing for all the users entering the stock market.

  • Ease of Carrying out Transactions
  • An investor doesn't have to visit the physical office or a company to buy and sell shares. Instead, a Demat account will make their transactions processed at a single click of the mouse.
    If an investor is looking to purchase shares, they can easily place an order, and the shares will be reflected in their Demat account within two business days.

  • Reduced Costs
  • In earlier days, physical certificates include several additional costs such as handling charges, stamp duty, and many other expenses.
    With Demat accounts, a user does not have to pay any additional expenses as they are eliminated. This ultimately lowers the cost associated with owning the shares of companies.

  • Reduced Risk
  • With physical share certificates, there was always a serious risk of loss, theft, forgery or mutilation. But when the Demat account was introduced, all of these risks have been eliminated from users' lives.

  • Faster Transactions
  • Before Demat accounts were introduced in the stock market, it would take several days to settle a single transaction in the stocks market. But now, with the help of a Demat account, a user can buy or sell every day, and the transaction is settled instantly after the end of the trading day.

  • Demat Account In Simple Words.
  • A Demat account also called a “Dematerialized account”, helps all users store their financial securities like bonds and shares in an electronic format.

  • What is the major benefit of Demat account?
  • The major benefit of having a Demat account is that it gives quick and easy access to all their investment and statements with the help of net banking.

  • How much time does it takes to transfer shares through Demat account?
  • Users can easily transfer their shares in no time with the help of a Demat account. Therefore, having a Demat account makes the whole process easier and much faster.

  • Do users have to pay additional expenses with a Demat account?
  • With Demat accounts, a user does not have to pay any additional expenses as they are eliminated. This ultimately lowers the cost associated with owning the shares of companies.

Final Thoughts

Nowadays, opening a Demat account has become mandatory for every Indian to start their trading journey. Demat account can help users take advantage of the capital market by investing in equities, mutual funds, and commodities.
In general, a user will enjoy the benefits and guaranteed profits on their shares by having a Demat account. So head straight to Nirmal Bang and open a demat account online to start trading and earn profitable returns.