The Key Benefits of Having a Demat Account for Active Investors
What is Demat Account? What are its benefits for investors?
Stock market trading has helped investors to earn substantial returns on their investments. Demat account makes buying and selling of securities easy and hassle free. Earlier, investors had to buy shares of companies in physical format i.e. share certificates which have their disadvantages.
Low security, difficulty in storing and transferring, and various other issues led to the dematerialization of shares. Opening a demat account was made compulsory for the investors to buy and sell shares and security in a de-materialized format. But what is demat account?
What is demat account?
A demat account serves as a virtual locker that users can access and operate to buy and sell shares in a de-materialized format. The account helps in the storage of virtual company shares in a completely secure manner without wearing about tampering and other issues associated with physical share certificates.
The following are the advantages of opening a demat account by a trader and investor:
1. Storage of virtual shares in a secured manner
The demat account helps investors and traders store the shares they own in a completely secure manner. The account serves as an online locker that can only be accessed by its true owner.
The original owner can access the demat account by inputting a secret password making it almost impossible for any unauthorised access.
Investors even receive an added advantage of converting their physical certificates into virtual shares which further can be stored in the demat account for easy access and storage.
2. Easy buying and selling
The demat account even helps with easy buying and selling of securities without worrying about any kind of hassle. Investors can buy shares, bonds, debentures, and other securities and store the same in their online demat account.
One can even carry out all the necessary transactions concerned with buying in selling through their bank account which makes the process more streamlined.
3. On time settlement
With the introduction of T+2 settlements, traders and investors can buy and sell a security with greater speed, accuracy, and efficiency. On-time settlement and quick transfer of purchase and sell amounts using a bank account have further enhanced the trading process.
4. Record keeping and maintaining accounts
The demat account enable daily record keeping and therefore help investors to keep tab on the daily transactions for analysis and understanding. Every bit of information related to daily transactions regarding the buying and selling of security is recorded on the demat account itself.
Eradicating the need for regular paperwork and record keeping, the demat account has helped introduce the hassle and error of keeping a track record of every transaction.
5. Affordable
In comparison with physical shares, the demat account is more cost-effective in terms of expenses like fees and charges. Traders and investors do not have to pay extra fees concerned with stamp duty, handling charges, etc. The demat account allows investors to keep a large portion of their profits with themselves rather than making payments for physical share certificates.
One can opt for a dedicated option trading app that can be downloaded on smart devices. The application is available for download to indulge in options trading, buying, and sharing of other securities most securely and conveniently.
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