Dematerialised or Demat account, is a digitized form of account which holds a customer’s portfolios of shares and other securities. It has annulled the requirement of holding physical share certificates. Demat is a trading account which was introduced in India in the year 1996, for National Stock Exchange (NSE) transactions. As per the SEBI guidelines, all the shares and debentures of listed companies need to be in dematerialised form in order to carry out securities transactions in any stock exchange from 31st March 2019.
Selection of the best demat account depends upon various factors such as demat charges, seamless interface, in-depth data analysis, the efficiency of depository participants etc. Demat can also be used to create a portfolio of Mutual funds, ETFs, shares, debentures and such similar stock market assets. This trading Account helps an investor or trader of securities to engage in trading through this account. In simple words, you can go long or short (purchase or sell securities) through your trading account.
Different Types of Demat Account
There are different types of demat account and it’s upon the investor to choose what kind of demat account to open, following are the types of demat account: –
Features of a Demat Account
An Investor who opts to open Demat account can witness various benefits. Here are some of the most common Features.
Use & Benefits of Demat Account
When we manage securities in physical form, we expose our self to risk of shares and stocks getting misplaced or damaged. Having a demat account addresses this issue and provides the demat account holder with a safe house for securities as here the securities are stored in electronic format. Thus, an investor need must have a Demat Account to hold his securities in an electronic format. Apart from this, an investor is required to have a demat account to trade in stock markets. Once the Demat and Trading accounts are open, the investor must begin his trading journey with a thorough understanding of the Security market and its instruments. It is always advisable to take the expert counsel as an investment in stocks is subject to high market risk.
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