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Importance Of Demat Account In Share Market

by Amit Bose / Finance / 12 Mar 2019

importance of demat account

According to SEBI guidelines, shares cannot be bought or sold in any other form other than demat. Therefore, if you have to buy or sell stock from the stock market, then you have to have a demat account. The full form of demat is ‘dematerialized’. Which means it is not in physical form. For instance, in relation to the stock market, the demat account is used as an account and locker, where the purchased shares are deposited. Here I am going to inform you about the importance of Demat account. See Those below…

Importance Of Demat Account:

Table of Contents

  • 1 Importance Of Demat Account:
    • 1.1 No Possibility Of Theft And Robbery:
    • 1.2 Shares Can Be Transferred Immediately:
    • 1.3 There Is No Stamp Duty On The Transfer Of Securities:
    • 1.4 You Can Also Sell At Least One Share:
    • 1.5 Operating With A Single Account:
    • 1.6 Bonus & Right Shares:
    • 1.7 Savings:
    • 1.8 Digitization:
    • 1.9 Low Cost:
    • 1.10 Easy:
    • 1.11 Auto Update:
    • 1.12 Secure Process:
    • 1.13 Paperless:

If you want to buy and sell shares through stock exchanges in India, then your demat account is mandatory. Shares held through the certificate can be bought and sold. If you are a new investor and now you are thinking of investing in shares then first open demat accounts. Here are some importance of demat account:-

No Possibility Of Theft And Robbery

No Possibility Of Theft And Robbery:

after the purchase of shares through a demat account, the chances of theft or robbery are negligible as all the shares are in electronic form. They are safe because of no risk and you can access them from anywhere. This is one of the importance of Demat account.

Shares Can Be Transferred Immediately

Shares Can Be Transferred Immediately:

Earlier, shares were sent to the company or registrar for transfer, which took months and many times they were lost. But now it is not so, you can transfer them immediately.

There Is No Stamp Duty On The Transfer Of Securities

There Is No Stamp Duty On The Transfer Of Securities:

once security transaction tax or securities exchange tax is paid, then the stock transfer stamp is not required to buy physically, nor paste it under the certificate as before. Does matter. This process was necessary when the demat accounts were not used. But now you can avoid these hassles by opening a demat account.

You Can Also Sell At Least One Share

You Can Also Sell At Least One Share:

it was difficult to sell shares first, you had to sell shares only in a group. Also, you could not sell the shares in odd numbers like – 33 etc; But now it is not so. You can also sell 1 stock through a demat account.

Now you can also nominate when you open a demat account and you can personally consider it. This was not possible before the share certificate was used.

Operating With A Single Account

Operating With A Single Account:

You do not have to open a separate account to buy a loan like Bond, NCD, tax-free bond etc. In addition to some debt instrument like bank and company fixed deposit, many instruments can be run in a single demat account.

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Bonus & Right Shares:

Bonus and right shares can be credited to bonus shares shortly and can also be credited to right shares. There is no need to wait for the certificate.

Savings

Savings:

By opening a savings demat account, many types of small savings are made. Such as in registration, practical interaction etc … Thus opening a Demat Account is easy. Many agents open your account by sitting at home, just be careful and open only after you have complete information.

Digitization

Digitization:

Demat account has changed the working system of the stock market completely, it gives you the freedom to transact and store online shares.

Low Cost

Low Cost:

You can easily open Demat Account with a very low cost and deal in securities. There are many such companies which provide you with the convenience of Demat Account in a few hours without any charge.

Easy

Easy:

You can buy and sell a number of different securities from a single Demat Account. No new security needs a new demat account, it simplifies your transaction. This is one of the importance of Demat account.

Auto Update

Auto Update:

Whenever you make a transaction of Share / Debenture or other securities, the details of your Demat Account are automatically shared with the third party and your account automatically updates. This is one of the importance of Demat account.

Secure Process

Secure Process:

If seen, Demat Account is a secure storage facility of securities, which prevents duplicate share, theft, misrepresentation, fraud etc

Paperless

Paperless:

This reduces Paper Work and provides the facility of depositing and transferring shares in digital form. This is one of the importance of Demat account.

Importance Of Demat Account In Share Market was last modified: March 12th, 2019 by Amit Bose
Tags:Demat account, demat account importance, importance of demat account

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