Demat accounts had its inception in the year 1996, prior to this point of time shares and securities were traded via physical platforms. The notable feature of a demat account is investors are allowed to hold their security in an electronic form. This ensures that the process of trading along with execution of trades is undertaken in a positive manner. To opt for the best demat account in India there are some definite advantages. Let us explore them as follows
Once you have physical securities it could be prone to theft loss, or even wear and tear. Even fake securities or bad deliveries go on to pose considerable risks. All these threats are put to bay with the help of a demat account. This provides holders with the option of holding all the securities in an electronic form.
To maintain physical securities is a physical demanding job. At the same time to keep a track of their performance is an added responsibility. For a demat account holders it becomes a convenient option in holding and tracking all the investments via single platform.
When physical securities were in existence buying or selling was possible only in the required quantities. The convenience aspect of dealing with a single security or even with odd lots seemed to be a very difficult task. The use of demat accounts kept these issues at bay.
With physical securities there involved some additional form of expenses in the form of handling charges, stamp duty and a set of other expenses. When you have a demat account all these expenses are automatically eliminated.
Because there is a lack of paper work, the time to complete a transaction is significantly reduced. This saves in time enables an account holder to opt for more purchase and sale of security or holdings in a shorter time frame with maximum degree of efficiency.
Demat accounts are simple, hassle free and prove to be a lucrative option. In the modern world of today they prove to be a must for financial planning.
The reasons why you need a demat account?
To convert physical securities to electronic form seems is an optional exercise. But monitoring of such securities seems to be a difficult task would be more difficult as compared to the dematerialized counterparts.
At the same time it would be really difficult to buy or sell securities in any physical form. The agents who are dealing in physical shares along with the people who are interested to purchase these shares are much less when you compare it to the individuals who are bound to deal with demat securities.
Lenders can go on to provide loans against various types of securities that are held in a demat account. You can even use them as collateral to avail loans. If the need arises they can go on to freeze your accounts for a certain period of time. This option is available for a specified range of securities.