After hearing some life-changing stories, have you decided to start trading or investing in shares or IPOs?
Although you are new, you may still want to keep your shares safe & sound, and you heard from your broker about a term called “Demat Account”.
The Demat account simply continues to improve the process of trading and keeping investments safe all the time. Stock is purchased and held in your Demat Account while online trading works smoothly.
With a Demat account, you can easily hold stocks, sovereign bonds, exchange-traded funds, mutual funds, and bonds.
Historical Perspective
Before digitalization, shares were kept in the form of physical files. This was a state of chaos, where traders used to regularly check the physical files, to make sure that the shares were in a saleable condition, and most importantly, to keep the shares safe from getting stolen or forged.
What’s Special about a Demat Account?
A single Demat account can be greatly beneficial for all your online trading. You can simply open your Demat account by registering with a brokerage firm or bank, and you can facilitate electronic settlement and trades.
The essential requirements for Demat account opening are:- a photo ID, address proof (Aadhaar card, passport, ration card, DL, Bank attested statement, Electricity bill, and phone bill), and a passport size photograph.
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So What Are the Benefits Of The Demat Account To Traders And Investors?
Demat accounts offer many benefits to traders and investors. Here are some of the benefits of the Demat account listed below:
- Global Capital.
Through Demat accounts, you can facilitate any overseas investors’ entry into the equity market. Onboarding foreign investors will boost the financial growth of the Indian economy.
- Easy To Use.
Upon opening a Demat account through a bank or a broker, you will be allotted a Unique Identification Number (UIN), which will be required for buying and selling shares.
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- Improved Portfolio Management.
Through an Online Demat account, you can easily manage and track your investments, gains, and losses. A Demat account makes portfolio management easy and flexible.
- Loan Facility against Securities.
Having a Demat account can benefit you as a financial asset. For example, securities via a Demat account can easily lend you a loan from any financial institute or lender. These holdings are used as collateral security because of their legitimate nature.
- Quick Buying & Selling.
Through an online Demat account, it is now much faster to exchange stocks. Previously, physical exchange of stocks would take around a month, which resulted in a decrease in the cost of the stock, and transfers were in physical form, which resulted in more money to be maintained and exchanged stocks.
- Rest Period.
Due to some reason, if the investor wants to hold his/her trading work, he/she can simply freeze or keep their accounts inoperative for a certain period without being liable for any penalty.
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The Takeaways.
A Demat account allows you to trade conveniently and safely. As per the latest norms and regulations, buying and selling stocks in physical form is no longer allowed. One can buy or sell stocks only through a Demat account.
To get the best benefits of a Demat account, try out the services provided by Kotak Securities, a full-fledged stockbroking house, and commence a new trading journey for yourself.