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7 Benefits of Demat Accounts to Know

Demat accounts are essentially bank accounts where you transfer and receive money. Instead of a physical exchange, you can trade shares digitally when you think it’s profitable for you. In the world of technology, this is a must-try.

A Demat account also serves as a safe place to deposit your savings. You can use it to store shares, bonds, mutual funds, government securities, and exchange-traded funds (ETFs). A security act is when you use your cash in the trading of shares that will ultimately help you grow your money for a long period. Moreover, when your assets are in a dematerialized form, you gain greater security and are less likely to be beaten by forgeries.

Demat accounts are similar to physical trading accounts, except that they are electronic. You place an order via your online trading account once you have created your Demat account.

Let’s look at some of the benefits of a Demat account.

  • Reduced Risks: Physical securities are vulnerable to theft, robbery, and damage. With a Demat account, that risk is eliminated since there is no chance that your certificates will be stolen or forged since they are stored electronically. Additionally, with a Demat account, you eliminate the possibility of receiving fake securities.
  • Savings: Due to the absence of physical securities, Demat accounts are free of additional costs like stamp duty, handling charges, and other similar expenses, which reduces the overall cost for the investor and makes the account cost-efficient.
  • Timesaving: Demat account eliminates paperwork, allowing the investor to complete transactions much faster than before. The investor can buy and sell more securities in a shorter period and more efficiently.
  • Convenient Process: Using a Demat account in conjunction with internet banking and online trading makes the entire process of trading very convenient and hassle-free. It creates a chain of transactions that is convenient and accurate. In any case, a Demat account gets automatically credited when shares get purchased in your trading account through an automatic debiting of your bank account. Also, when shares get sold from your trading account, the Demat account is automatically credited.
  • Single Account: Having your investments held in a single account lets you track them easily. And you can hold all of your investments with ease. You no longer have to open separate accounts when purchasing NCDs, tax-free bonds, etc. It is easy to track the performance of your portfolio when most of your instruments are held in one place – your Demat account.
  • Odd Lot Issue: Odd Lot Problem Before the introduction of Demat accounts, traders had to buy or sell a specified quantity to buy or sell shares. This was a major hassle for them in physical certificates.
  • Shares get transferred immediately: Before Demat accounts came into existence, shares had to be sent to the company or the registrar to be transferred.

Having a Demat account is convenient, hassle-free, and lucrative because of the many benefits mentioned above. Many sites can help in creating Demat accounts, for instance, 5paisa in all is an informative website for early movers.


Thomas P
I believe in making the impossible possible because there’s no fun in giving up. Travel, design, fashion and current trends in the field of industrial construction are topics that I enjoy writing about.


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