Pointers for a Demat Account
In earlier times, dealing in shares was a tedious process, with various risks involved associated with poor delivery, fake securities, flawed paperwork, delays, frauds and thefts. A fully automated system promising easy and convenient way of possessing securities has made things convenient to a great extent. Creation of a Demat account is a one-stop solution. What makes this an incredible deal is the conversion of all the shares and securities to an electronically Dematerialized form.
The functioning of a Demat account is easy to interpret and understand. All the stocks that are purchased are shown in your account in a Dematerialized form. The moment you choose to sell a part or the entire share holdings, an equivalent amount of money is transferred into your account. Access to a Demat account can be made online provided the password and account details are known. Demat account has a row of benefits attached to it:
1) You won’t be charged stamp duties on transfer of your securities, since they are electronic transactions.
2) Minimal paper work on transfer of securities leading to reduced transaction costs.
3) No bulk share purchasing is required. One could buy and sell as little as one share.
4) Demat account is devoid of problems that are associated with physical share certificates.
5) It is highly secure and user-friendly, with customer service always available.
6) Depository participant is responsible for transmission of securities, thereby making it unnecessary for the account holder to notify companies.
7) Systems today are so advanced that the traders in the present era can have the leisure of working even from home.
8) Transfers are not delayed but immediate, quick, and easy.
9) On the investor front, the acceptability and liquidity are extremely high, whereas on the broker end, the risk of delayed settlement is eliminated and greater profits are made possible due to increase in trading. This ensures a win–win situation.
10) Boosts the idea of secondary and quick income. Along with the regular 9–5 job, dealing in share markets has become an easy job due to automated Demat accounts.
Since buying and selling of shares is not allowed in any form except a Dematerialized form, a Demat account for dealing in shares is a wise and mandatory option.