Business

What is the importance of demat accounts which make them popular among the masses?

9:24 PM Lokesh kumar 0 Comments

The share market has some rules and regulations as per which it runs. One of the rule is about the demat account. To keep stocks and other securities protected, people use demat or dematerialized accounts. While performing trading on the internet, shares are bought and held in a demat account which eases the burden on all users. This type of account can hold every investment an individual makes in various government securities, trade funds, shares, mutual funds, and bonds. The concept behind this initiative is to dematerialize or transform any physical share into an electronic mode so that the maintenance and accessibility of the share are possible from every corner of the world. A trading account is necessary when one decides to be active on the share market on an intraday basis.

Advantages of a DEMAT account:

All the right and bonus shares, which are the property of the investor, are credited to the investor’s account immediately. The risk involving loss due to theft or fire is eliminated,and the transaction costs become low in the concerned segment.

The problems which follow physical share certificates are solved by the utilization of demat account.

The filing of transfer deed is no longer necessary thanks to demat account. Money is also saved by avoiding the cost of stamp duties as all the information is electronically stored, thereby reducing the transaction cost.

Why keep a demat account?

Those who look to have benefits from the equity of companies through direct investment in shares should perform online brokerage with the help of Discount Brokers in India. A host of brokerage firms are now helping people in the opening of broking accounts so that everybody can invest online. Both discount and full-time brokers perform this service. The only factor differentiating between the two is their additional duties. Discount brokers are meant to reach the goals of an investor by making crucial decisions based on the customer’s instructions. Although they have derivatives and equity to offer, the advantages of full-time brokers are worth reckoning. The full-time brokers provide all the services of a discount broker, and numerous investing choices for IPOs (Initial Public Offerings), insurances, and mutual funds on their proposal.During the test of time, it is the full-time broker who stands out thanks to their in-depth analysis and a better understanding of the market.

For those who have made mistakes while dealing with IPOs must remember that full-service broker, and not discount ones, give a fundamental report based on real-time analysis. The method and belief of these brokers hardly go wrong, which is why most of the brokers in the market are full-time. Three things are essential for performing investments- a bank account, a demat account,and a trading account. After close thinking, one can infer that demat accounts are cousins of trading accounts when it comes to utility. People can store their securities in an electronic method with a demat account while investing in numerous ventures like mutual funds through a trading account.