Demat is an abbreviation of dematerialization. This refers to the conversion or physical shares to electronic. A Demat account will allow you to keep your shares electronic. You can trade on it in addition to keeping it. In simpler words, the platform has made it simple and quick to trade shares. It functions just like any bank account except you will have shares, not money. Demat Accounts can be used for trading in any securities regardless of their type. It is much cheaper than using a broker. In addition, it will inform you of any changes to your securities (e.g. bonus issue. right issue. dividend). These details will be kept in your knowledge.
If your shares are held in a physical form, such as. If your shares are held in paper form, then there are chances that these documents may become damaged or lost. In such cases, your right to share will also be lost. Demat accounts are able to store your shares electronically and there will be no such issue. SEBI made it compulsory to keep shares in Demat accounts. Shares in physical form are now exempted from the risk. All transactions that involve trading in shares are immediately reflected in your account.
Demat accounts enable you to sell and buy shares at any hour you choose. You don’t need paper forms to buy and sell shares. It is possible to purchase shares instantly and receive profit. In short, you can make quick decisions. The process of buying and selling shares used be time-consuming. However, now you can make quick decisions by tapping on your smartphone’s screen.
Demat accounts allow you to take out loans on shares. Your account can be frozen if you do not use it for the moment. The account can be unfrozen once you have used it again.
It will also include a listing of the shares you’ve traded in. You can see the dates when you bought and sold shares. A share will be added to your account. The money will then be taken from the wallet. Also, when you sell a share of stock, it will be debited from the account and money will go to your wallet. You’ll be able to track all transactions.
There are certain steps that you should follow when opening a Demat card. You can visit for more information and to open a Demat Account.