To purchase, sell or hold securities you require a Demat account. It is a digitally functioning account where you hold the digitalized version of stocks and shares. There are certain benefits of a Demat account that you need to be aware
There is a reduced risk when it comes to the loss of documents
In physical shares and bonds, the chances of document loss are relatively high. The shares may be misplaced if there is a natural disaster that forces you to shift base. Hence storing shares in an online format is a safe and better option since it allows you to have a permanent digital record of your shares.
Apart from using it as a security deposit for your savings, through the securities maintained in your bank account you may avail of various types of loans. The securities may be served as collateral when it comes to availing loan from a bank.
In the case of physical bonds or shares, the risk of fraud is high. But when it comes to operating a paperless Demat account, you are going to have all the necessary details and authenticity in your account that avoids forgery or any form of impersonation.
The main benefit of online transactions is cost- reduction. If you choose to open up a Demat account online you can prevent expenses like stamp duty or other handling charges that are necessary for physical bonds. The only charge that you need to pay in this case is brokerage. But if you are opting for discount brokers you will save more money.
The time that is taken for buying or selling shares in a Demat account is minimal. Hence the liquidity of shares, in this case, will be easy and transferring of shares was a lengthy process. Since the securities are stored in a decentralized form the processing of the share documents takes place in a jiffy.
Another benefit of a Demat account is that the number of physical documents is almost nil. So, it becomes easy to track down all the documents with relative ease. No longer need to maintain a record manually. All the documents are held safely with the records of each investment.
The concept of globalization is encouraged with the opening of a Demat account. The best part is that foreign investors are able to gain access to the Indian stock market through these accounts that benefit the Indian economy in a major way.
The procedure of opening a Demat account is relatively simple. Just you require a few identity documents to confirm that you are the person who is keen to open the account.
If you are looking to open a Demat account you can choose the platform of 5 paise. They are one of the fastest discount brokers and rank among the top 10 discount firms. They are known to provide the best Demat account so that the customers have a smooth and hassle-free experience.