What is a Demat Account: Meaning, Benefits & How to open a Demat Account

Demat Account Means & How Does it Work in India?

In India, any investor who wants to invest, trade, and own securities like stocks, bonds, and mutual funds must open a Demat account. In today’s digital age, we all have digital wallets like Paytm, Phonepe, and Google Pay, and also online bank accounts. The same way a Demat account (Demat is short for dematerialized), allows an investor to hold financial assets in electronic form, with an aim of facilitating safe, easy, and convenient trade for users. In simple words, a Demat account is just like a bank account, the only difference being that when a bank account holds cash, the Demat account holds shares and other securities.

Demat accounts debuted in India, and prior to that investors traded in physical share certificates. However, fast-forward 2021, the Securities and Exchange Board of India (SEBI) requires everyone who wants to trade Indian securities to have a Demat account. That means a Demat account is mandatory for anyone who wants to conduct securities trading in India. These accounts are maintained by depository organizations like the National Securities Depository Limited (NSDL) or the Central Depository Services Limited (CDSL).

Demat accounts have drastically changed the way traders buy, sell and hold their securities and made trading a more open playing ground.

https://blog.arihantcapital.com/index.php/what-is-demat-account-invest-in-india/

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Created on Dec 17th 2021 05:34. Viewed 442 times.

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