Today, we rely on technology for numerous mundane tasks. We store most of our information, like contacts, pictures, location history, etc., on our devices. We do so for easy access and enhanced functionality. Even banking information gets stored in mobile wallets and banking apps. Both provide secured access to our funds. A Demat Account works similarly. It stores shares and other securities electronically.
Also called Dematerialisation, the account allows you to buy and sell shares online. Be it Mutual Funds, Bonds, Government Securities, or other investments, everything gets saved digitally. This way, you need not maintain the physical share certificates for every trade. If you want to start online trading, you should open a Demat Account. Once done, you can access the following facilities:
Accessing possibilities
As the account is maintained electronically, you can convert the securities into different formats. This makes accessing them with other media elements easy. You can also do investments, trading, monitoring, and other operations using the internet. Be it your smartphone or computer, brokers have websites and mobile applications for online trading today.
Dematerialisation and rematerialisation
As you open a Demat Account online, converting securities in different forms becomes a simple task. This relates to dematerialisation, which converts physical share certificates into electronic form. Conversely, you also get the electronic securities converted back to their physical condition. This is called rematerialisation. Such ease of conversion helps in exchanging securities promptly and leveraging the booming market.
Loans
Financial requirements are never-ending. They only get satisfied with the returns gained from securities. But this takes time and is not feasible to fulfil urgent needs. In such cases, applying for Loans is a sensible choice. However, most credit options require collateral. If you want to avoid this, you can use the securities held in your Demat Account to get Loans.
Instant transactions
Delivering physical instruments took days or even weeks before Demat Accounts were introduced. This affected the transaction speed, which cost heftily to make trading decisions. These issues are now resolved with a Demat Account that has reduced the waiting period and enabled faster transactions. However, you incur Demat Account charges and other costs for convenience. Ensure to check them before selecting the stockbroker.
Streamlined paperwork
The entire account opening process gets completed online. Hence, you need not struggle with the documentation process. You only need to upload the required paperwork online with the form. Some essential documents include your voter ID, PAN Card, Passport, ITRs, address proofs, etc. These may differ based on the Depository Participant you choose. Check their requirements to understand the same.
Considering these essential factors helps you get through the account opening process smoothly and not just invest in share markets but upcoming IPO as well.
