The capital market in India has grown in leaps and bounds since it first took shape. In recent years, we have seen remarkable growth in the capital market concerning listed organisations, trading volumes, investor population and the number of stock exchanges. In recent times, its sudden spurt in growth has been primarily due to the introduction and rapid acceptance of Demat accounts.
If you are seeking to trade stocks online, it is imperative to hold a Demat account. The relevance of a Demat account to your portfolio is that it allows you to maintain your securities and many other investments electronically. The complete process of investing, holding, monitoring and trading through a Demat account is not just fast and convenient but also cost-efficient and secure. If you haven’t opened a Demat account, you may want to look at brokers such as Kotak Securities, banks or depository participants offering Demat account services.
Let’s look at the many benefits of Demat account
- Reduced risks– Holding physical securities exposes them to hazards such as loss, theft or damage. Moreover, counterfeit share certificates or bad deliveries can also endanger your stocks. When you open a Demat account and trade through it, all these risks are eradicated, as all your securities are held in an electronic format.
- Convenient holding: Keeping a tab on physical share certificates can be unmanageable and laborious. Additionally, maintaining their records and monitoring the performance can be an increased responsibility. As a Demat account holder, you can conveniently organise and watch all your investments from a single account.
- Odd lots: You can only buy and sell in specified quantities if you are trading in physical certificates. Moreover, dealing with odd lots or single security is also a hassle with physical share records. In a Demat account, all these issues are removed.
- Decreased expenses: There are numerous costs associated with holding physical share certificates. These include stamp duty, handling fees, and other charges. Since a Demat account does not require the presence of physical records, you can save on unnecessary costs.
- Reduced time: Because a Demat account does not require paperwork, the time taken to complete a transaction is greatly minimised. Subsequently, you get more time to make additional purchases or sell your security holdings with much
- Easy transfer of shares: You can easily transfer all your holdings to buy or sell shares through a Delivery Instruction Slip (DIS) or Receipt Instruction Slip (RIS). These slips are essential to execute a transaction smoothly.
Conclusion
In the past, converting physical securities into electronic form was optional. However, the Securities and Exchange Board of India (SEBI) has stated that all physical securities must be converted into the electronic format before December 5, 2018. This could be one other reason why you may want to open a demat account today. With the rapid rise of investors opening Demat accounts, the numbers of agents dealing in physical shares, as well as buyers purchasing them too, have significantly reduced.
The move to dematerialise physical shares will substantially enhance the security and convenience of shares in the electronic format; one of the many advantages of holding a Demat account. These days, there are numerous offers to consider, such as a three-in-one account from Kotak Securities. Here, an investor receives an interlinked bank account, trading and Demat account. So what are you waiting for? Go now and start trading through your demat account right away.