5 Benefits of an Online Demat Account

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If you want to buy and sell shares on the stock markets, you must have a dematerialization or demat account. For this, you have to undergo a one-time procedure of signing the form and submitting the required documents.

Once you complete the formalities of opening an account, you may enjoy several benefits. Here are five such advantages.

1. Eliminate the risk of theft or robbery

When you hold your investments in an electronic form, there is no risk of theft or robbery of the physical certificates. Furthermore, you eliminate the possibility of any forgery when you hold your investments in a demat account.

2. Quick and immediate share transfers

Prior to the availability of such accounts, shares had to be sent to the registrar or the company to get these transferred to your name. This was a time consuming and cumbersome process. Furthermore, there was a risk of losing the certificates. With a demat account online, the transfer happens immediately without any risk of shares being lost or damaged in transit.

Moreover, earlier you needed to buy stamps when you wanted to transfer physical certificates. However, the dematerialization accounts levy security transaction tax, which eliminates the requirement of buying and using transfer stamps.

3. Buy and sell a single share

Prior to dematerialization, you were unable to buy or sell a share in odd lots. You could trade only in marketable lots, such as 50, 100, and so on. However, with dematerialization, you may trade in any quantity, which may be as low as one share. In addition to being more convenient, the online platform has reduced the transaction costs.

4. Nomination facility

A dematerialization account allows you to nominate another person without making him a joint holder. This provides you with better control over the account and efficient transfer to your nominee in case of your demise.

5. Multiple holdings in a single account

A dematerialization account allows you to trade and hold various financial instruments such as bonds, non-convertible debentures (NCDs), tax-free bonds, shares, fixed deposits, and much more in a single location. In addition, corporate actions like issues of rights or bonus shares are executed immediately without any delay or hassles. You do not have to wait to receive the physical certificates after the corporate announcement.

When you open a demat account online, you are able to reduce the transaction costs. You do not have to spend money on a registered post to send physical certificates to different locations when you buy or sell shares. Furthermore, you are able to easily track your investment portfolio and know the current market prices and the loss or profits on your holdings. When you choose an online trading account and link your bank account to your dematerialization account, the entire procedure becomes convenient and quick.

So, open a dematerialization account online and start investing today.

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