Demat or a dematerialized account is a form of account which is used to hold shares and other financial instruments in a dematerialized form. In simpler words, it is similar to our savings account, but instead of carrying cash, it holds shares and other financial instruments.
Some of the Advantages of a Demat Account are as follows :
Reduction of Risks:
Physical share certificates are prone to risks such as theft, damage during storage, losses, etc. Another risk physical share certificates offer the chance of counterfeit share certificates. Demat accounts these risks are shares, and other securities are stored in an electronic form within your Demat account.
The ability to Invest in Odd Lots:
Physical share certificates come in fixed lots, for instance, a lot of 100 shares. If an investor wants to share 50-shares, it is not possible to split a share certificate and buy or sell an odd number of shares. Whereas using a Demat account, investors can buy or sell as many shares, even transact in a single share without any complications of restrictions.
Reduction of Costs:
Using physical share certificates involved increased costs such as stamp duty cost, handling charges, the cost involved storing them securely, etc. Demat expenses have eliminated these expenses.
Time-Saving:
Investors can buy and sell shares using a Demat account with a click of a button. As all transactions are done online and electronically without any paperwork, the Demat account saves the account holder time and money.
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