Why Are More People Opening Demat Accounts?

by Giselle Lobo Writer & Blogger

The Stock Market has witnessed several new entrants in the past few years. Most investors are finding trading appealing and jumping on the bandwagon. The digital ease of buying and selling shares has made online share trading even more attractive. You can make quick trading decisions from anywhere by engaging in Online Trading. The management of your diverse stock holdings also becomes easier.

Besides being convenient, it is mandatory to open Demat Account as per the Securities and Exchange Board of India guidelines. You should choose a Depository Participant to open a Demat Account. Additionally, you should link it with a Trading Account, which allows you to buy and sell shares. Here are other reasons why more people are opening Demat Accounts:

Easy usage

Dematerialisation was introduced to overcome the shortcomings of physical share trading. Hence, it is an updated and improved medium to trade. You get benefits like minimal documentation, no waiting time, low risk of loss, etc. These factors lead to easy maintenance of securities. Moreover, the online portals make tracking your securities easier.

Efficient management

When your shares get handled electronically, you enjoy total control. The apps and trading platforms come with an interactive interface. Owing to this, you can view your security holdings and their performance with ease. This facilitates making quick trading decisions. Also, you get all the information you need at your fingertips. These aspects are appealing to investors entering the stock market.

Elimination of risks

Dealing with physical certificates presented the risk of damage, theft, and forgery. Hence, investors had to take extra care while placing buying and selling orders. This caused a delay in leveraging market conditions. A Demat Account eliminates such hassles or risks. You can control your shareholdings through the trading app. You also get a login id and password, which helps prevent unauthorised access.

Swift transactions

When you buy shares, they get credited to your account in T+2 days. The same is applicable when you choose to sell them. The swift transactions happen as you use the trading platform after the Demat Account opening. The buying and selling orders process smoothly through the connected accounts. You get updates about it through SMS and email.

Share transfer facility

You are solely entitled to your shareholdings. However, you should appoint a nominee during account opening. This is essential to undertake transfer in the event of your death. You may nominate your parents, spouse, children, or a close relative. They attain the ownership of your shares after your demise. The transfer to such beneficiaries is done with ease through a Demat Account.

Asset Management Companies use the documents you submit to verify your identity. Digital management makes such verification a quick process. This lets your investments grow with your nominee to attain financial goals smoothly.