Demat account is an account wherein you can hold shares of various companies in the dematerialised form.You can open a demat account with a share brokerage or a bank. You should necessarily have a PAN card for opening such a account.
You can operate your account by giving the filled in delivery instruction slips provided. for selling the shares in your account.
A Dematerialized account is opened by the investor while registering with an investment broker. The Dematerialized account number is quoted for all transactions to enable electronic settlements of trades to take place. Every shareholder will have a Dematerialized account for the purpose of transacting shares.
A demat account also helps avoid problems typically associated with physical share certificates, for example: delivery failures caused by signature mismatch, postal delays and loss of certificate during transit
- Easy and convenient way to hold securities
- Immediate transfer of securitiest
- No stamp duty on transfer of securities
- Safer than paper-shares (earlier risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc. are mostly eliminated)
- Reduced transaction cost
- Reduced paperwork for transfer of securities
- Change in address recorded with a DP gets registered with all companies in which investor holds
- securities eliminating the need to correspond with each of them separately.
- Transmission of securities is done by DP, eliminating the need for notifying companies.
- Automatic credit into demat account for shares arising out of bonus/split, consolidation/merger, etc.
- A single demat account can hold investments in both equity and debt instruments.
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