The Indian equity market is one of the major investment avenues for people to park their savings. To be able to transact in the stock market, a demat account is the primary requirement. In this article, you will learn about the basics of the demat account.
Let us begin the article by learning the meaning of demat account
What is Demat Account?
Demat account or dematerialised account holds the shares or securities of an individual in an electronic form. Demat account provides the facility of online trading in shares or securities. This account holds various investments of an individual at a single place. The various types of investments held in this account include shares, mutual funds, bonds, exchange-traded funds and government securities.
Let us now understand the features of the demat account.
Features of Demat Account
Convenience
You can have access to the demat account from anywhere across the globe via smartphone or computer. There is no need for the investor to be physically present to settle transactions. In addition, it also provides the convenience of having access to all investments at a single place.
Lower Risk
Holding shares electronically protects the demat account holders against the risk of theft, losses or damages. Furthermore, because of the holding of shares in electronic form, there are no issues of bad deliveries or fake securities.
Odd Lots
Without a demat account, the buying and selling of shares were possible only in specified quantities. But after the introduction of the demat account, an individual can purchase or sell shares of any quantity and there is no more odd lots problem.
Saves Time
Demat account involves no paperwork. Hence the time required to complete a transaction is reduced considerably. In fact,more number of transactions can be carried out in a shorter span of time with greater efficiency.
The above mentioned are a few features of demat account. Let us now understand why do you need a demat account.
Why do you Need Demat Account?
Demat account is not only essential to purchase shares or securities from the market but it is also important to transfer physical shares from one person to another. In addition, it is mandatory to open a demat account in order to convert the physical holdings of shares into electronic form. Therefore, if you are looking to open a demat account, you can contact Kotak Securities for availing hassle-free services.
