What are the Demat Account features?

Dematerialisation is transforming physical securities into electronic format for secure storage. A Demat Account allows you to hold securities and trade them digitally. The Securities and Exchange Board of India makes it mandatory for every investor to trade on the stock market.

Knowing what is a Demat Account is important for everyone, especially traders and investors. As it is an online account, you can access it directly online. This account lets you trade with shares, ETFs, Mutual Funds, and Bonds anytime. Unlike traditional processes, it eliminates the role of a third-party and makes trading economical and convenient.

What are its features?

A Demat Account works like your Savings Account, the only difference being that it holds securities instead of money. Traders must link their Demat Accounts to their Savings and Trading Accounts for a safe trading experience. The features of this account are as follows:

Digital transfer of securities

The Demat Account functions like any Net Banking platform. You can easily buy or sell securities with a data connection on your smartphone or laptop. You can quickly transfer securities through an electronic delivery instruction slip from one Demat Account to another.

Less risky than physical securities

With a Demat Account, you do not need to hold assets in their physical form. It eliminates the chances of theft and saves you from the storage and transportation expenses of holding physical securities. Demat Accounts have every information about your transaction and keep your securities safe.

Less costly

Unlike traditional trading processes, trading with the help of a Demat Account is less costly. You need not pay handling, registration, or other additional charges for operation when you open a Demat Account. It allows you to save your share certificates without worrying about loss or damage.

Collateral for Loans

You can use the current holdings of your Demat Account as collateral to access secured Loans. Both NSDL and CDSL provide this service to traders with Demat Accounts. You can use these Loans for other purposes, such as buying a house, car, paying for education, debt consolidation, etc.

Instant trading facilities

Trading in the stock market was time-consuming before online Demat Accounts were available. It took a long time to settle payments. However, knowing what is a Demat Account and using it for trading has revolutionised trading activity. Now, you can sell and buy shares by paying for them instantly. You receive your purchased shares within two working days after completing your purchase transaction.

Receive dividends

With a Demat Account, you can instantly receive dividends and bonus shares whenever a firm releases them. No application process is mandatory for these corporate actions.