Why is a Demat account important?

Demat account is the primary requirement to trade or invest in the Indian financial market. Demat account holds your securities in an electronic form thereby eliminating the need of holding physical securities. With a demat account, the whole process of trading and investing in shares, mutual funds, government securities, etc. has become more convenient and faster. Here are a few reasons that make a demat account important.

• Safety

Demat account holds the shares and securities in electronic form which overcomes the risk associated with holding them in the physical form. With a demat account, there is no risk to your shares or securities of being stolen, misplaced or damaged.

• Trading

Trade in the stock market is not possible if you do not have a demat account. Unless you have a demat account, you won't be able to buy or sell shares of publicly listed companies.

• Hold multiple securities

Demat account helps the investor in overcoming the hassle of holding multiple securities by preserving all the securities in just one account. This makes the task of tracking financial products simpler and easier.

• Lower Costs

Additional costs like stamp duty and handling charges that were applicable to physical share certificates are not applicable in the demat account. The elimination of all such expenses has lowered the cost of trading and investing in shares.

• Odd Lots

When shares were traded in physical form, it was not possible to trade in a single security or odd lots. But with the introduction of a demat account, the problem of odd lots has been solved and now you can purchase any quantity of share you wish to.

• Flexibility

Demat account provides you the flexibility to operate it from anywhere you like. By using a laptop or mobile phone, you can monitor your investments and place transactions. All you need is an active internet connection.

The above mentioned are some of the facts that highlight the importance of opening a demat account. If you are looking to open demat account, you can get in touch with Indira Securities.

Indira Securities is one of the top most financial service providers. By opening a demat account with us, you get the facilities to trade and invest in stock markets at low brokerage rates. We guide our clients in the IPO application process. You can trade using our mobile application. We provide regular stock recommendations to the clients using stock analysis tools.

Demat account is not only meant for shares. Other instruments like bonds, etc. can also be held in a single demat account.

The delivery risks like forge shares, theft of share certificates, wrong deliveries have been eliminated with the introduction of demat account. Once a trade is executed, it is automatically reflected in the demat account.

It leads to automatic updation of the transactions with the company. Therefore, it eliminates the need to give details like address again and again for different transactions.

• It saves cost, as no stamp duty needs to be paid. Earlier, stamp duty was charged on every security transfer.
• Maintaining and managing securities in the demat account is much easier than holding them in paper form like share certificate.

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