The benefits accruing from a demat account

by Yogesh Mathpal Seo Executive

In India if you are planning to buy or sell shares then a demat account is a must. The shares that are held by certificates can be bought or sold. Be it an existing or a new customer opening of the best demat account for intraday trading ceases to be compulsory. As there are a lot of documents along with signatures involved it is worth to be opening a demat account.  Basically a onetime procedure, all the more so to know about customer guidelines. There are various benefits of opening a demat account

No chance of forgery with a demat account

No possibility of forgery or your shares getting stolen as they are held in electronic form. This goes on to cut down the risk in the earlier days where the shares were being held in physical form. In fact this is one of the major benefits of opening up a demat account via an online form.

You can transfer the shares on an immediate basis

In the earlier days shares used to be sending over to the companies or register to transfer on to an individual’s name.  This went on to take months and sometimes the certificates were lost. This is not going to take place in a demat form as the transfer of shares occurs immediately.

Stamp duty is not needed for transfer of securities

When you go on to pay a service transaction charge, no need to physically purchase transfer stamps and paste it at the bottom as was the case earlier. When the demat account was not there the process was cumbersome as you had to visit the stock exchange in order to purchase the share transfer papers.

It is possible to sell even a single share

In the days gone by an individual could not sell share in odd lots. For example it was not possible to sell 34 shares as you had to sell them in lots of 50, 100 or 200. This trend is now eradicated as you can go on to sell even one single share.

It is possible to nominate

When you are opening a demat account you can nominate an individual. Earlier this was not possible as there were no share certificates as there was a need for a joint holder. You just need to check out with your DP on how to add a nominee if you have not gone on to adds one.

A single account

You can go on to operate with a single account. There is no need for a separate account in order to buy commodities as apart from a few company investments most of them are held in a single form.

In addition to this bonus shares can be credited on an instant basis. You do not have to wait for a certificate. Apart from this there is a reduction for additional costs on AD to your registered certificates that was the norm in the days gone by.

 

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Created on Dec 30th 2019 04:39. Viewed 337 times.

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