A Demat account is an account that is used to hold stock in electronic format. These demat Accounts or dematerialized accounts cater the facility of holding both the shares and securities in electronic format. At the time of online trading, shares are purchased and held in a demat account. Hence they facilitate the convenient trade for the users.
It is important to know that a demat account holds all the investments that you make in shares, exchange-traded funds, government securities, bonds and mutual funds in a specific place. The good news is that you can even avail Online Demat Account for your shares and all. There are good accounts out there that you can walk through and pick the one that suits your needs. Always remember that in the absence of a demat account; you cannot do any type of online trading.
To be more concise, in the earlier times the investors had to get and preserve appropriate documents and certificates for the entire amount they have invested. Lately, the introduction of Demat Account has brought a great change in the share market industry. it is true that a demat account is the convenient and safe means to hold shares and securities just like any savings account meant for cash. It is important to note that demat account opening can be possible only with the assistance of a depository participant, who upkeep the records of the investor in a dematerialized shape and also get all the deals for purchasing and selling. Once you have opened the account, you are going to be allotted an account number coupled with a DP ID number. This number has to be mentioned for all the future communications.
Once you have this account you would be allowed to maintain the entire portfolio of your investments in MFs, and shares and other securities in the electronic format in one account. This would be the account that totally avoids the danger of robbery, misplacement or even disfigurement of your shares, securities, and other bonds. Then if you have a demat account, you can even avoid the threat of bad-delivery, delay in moving the securities physically or holding the duplicate documents. Come on don’t forget that you would be assured of the security of your ongoing investments by electronically holding the investments.
If you wish to keep a track of everything you are doing then too this account is going to be of great help. You can keep tenacious track of your investments and safety that too without worrying about the managing or handling of physical papers. The icing on the case is that investors who have demanded account are in a position of relishing quicker benefits such as bonuses and even the stock splits. You should note that demat account is considered as the chief account through which you are free to access and maintain all the investments you have by catering special access of ETFs, stocks, IPO, bonds and even the other investments.
So, if you are thinking of having a demat account, you can look for online accounts too. It is all about your convenience!