Benefits of Demat accounts | Fusion - WeRIndia

Stock trading in India is increasing. In the past, investors used to contact brokers on phones and execute orders.

As technology grows, investment methodologies also improved. Trading accounts became important. Brokers used to provide their investors with a trading account and charge a certain percentage of trade amount in return.

But, Demat accounts came into existence over time. Now, they are needed to invest and trade in the stock market.

Demat account or de-materialised account provides the facility of holding shares and securities in an electronic form.

Now that most of the trading is done online, Demat account is essential to buy and hold. Demat accounts help store shares digitally. Investors can track the record of their shares and the monitoring process is easy.

The Demat account must be registered with NSDL or CDSL.

Here are the benefits of Demat accounts:

• Maintaining physical certificates of shares is difficult. On the other hand, Demat accounts can be held easily. One can also track securities easily.
• Holding physical certificates involves various costs like handling costs and stamp duty. Demat accounts do not have all these costs. Hence costs are reduced with Demat accounts.
• These accounts have lower risk when compared to physical certificates which are prone to be lost or stolen. They can also get damaged. In addition to that, bad deliveries and fake certificates are other problems. But, Demat accounts do not have all these risks.
• Demat accounts reduce time consumption. Physical certificates involve paperwork due to which a lot of time is consumed. But, Demat accounts do not involve such transactions, and hence need less time.
• Demat accounts enable one to deal with odd lots or single security, unlike physical certificates that help in the purchase and selling of specified quantities of the stock.

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