Benefits Of Demat Account

Introduction of demat account has simplified the process of trading and investing in shares and securities in India. Demat account or dematerialised account holds your shares and securities in an electronic format. Earlier, when demat account was not there the shares and securities were physically issued and traded. The whole task of investing and monitoring the investments was very cumbersome. Demat account has brought many benefits over the physical holding of shares and securities. In this article, we will list down some of the benefits of demat account.

Benefits Of Demat Account

  • Low risk

Demat account holds shares and securities in electronic format. Therefore, the risks like theft, damage or losses of the physical securities no more exist. By opening a demat account you eliminate all the risks that were applicable to physical securities.

  • Reduced cost

Demat account significantly reduces the cost for the investors. Demat account does not require you to pay any stamp duty on the securities for holding shares and securities in electronic format. Earlier, stamp duty was applicable on physical holding of securities.

  • Saves Time

There is no paperwork involved in the demat account. This leads to a quick completion of transactions in a very short span of time. The demat account holder can carry out a number of transactions as compared to what was possible without a demat account. This makes demat account worthy for investors or traders in the stock market.

  • Transfer Of Shares

By using the delivery instruction slip (DIS) or receipt instruction slip (RIS), shares can be transferred from one recipient to another through the demat account. These slips contain all the necessary details which are required for completing the transaction smoothly.

  • Monitor Portfolio Performance

Demat account provides the facility of holding all your investments at a single place. This enables you to track the performance of all your investments and make quick decisions.

  • Avail Loan Facility

Demat account holder can use the securities held in the demat account as collateral to avail loan from the lenders. The investor always has the option of creating liquidity by pledging his securities to the lenders.

  • Corporate Advantages

Many corporate advantages like refunds, dividends, interest, etc. are added to the demat account automatically. Even the corporate actions like stock split, bonus issue, rights issue, etc. get updated in the demat account.

  • Multiple Accessing Options

Demat account provides the facility to the holder to access the account through multiple modes. The investor needs internet facility and computer, laptop or mobile phone to log in to the demat account from anywhere across the globe. With multiple accessing options, trading and investing in the stock market becomes a hassle-free experience.

  • No Odd Lot Problem

Before the introduction of demat account when the physical settlement of shares and securities were done, the transactions had to be done in fixed quantity or lots. But with the demat account, the investor can purchase or sell any quantity of shares he desires. Hence, demat account is a solution to the problem of odd-lot of shares.

  • Easy to Hold

Holding shares in the demat account is very easy. There is no storage risk involved as all the investments are held in electronic format. Moreover, it is the duty of the depository participant to safeguard and maintain the investor’s account. Furthermore, the demat account holders get the facility to nominate their kin and carry out the automatic transfer of shares.

The above mentioned are few of the benefits of demat account. By opening a demat account with Kotak Securities you can not only avail the benefits of the account but also enjoy the premium services of the leading broking firm.

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