Benefits of Open Demat Account
A Demat Account is one facility that every investor has to avail to enjoy online stock trading using a trading account. For over two decades, the traders have been using the Demat Account opening service that the NSDL (National Securities Depository Limited) started in coordination with the CDSL (Central Depository Services Limited). It allows the investors to keep their shareholdings safe and secured in the Demat form on the online platforms. There were many drawbacks of offline trade, and the stock market faced quite some criticism during the early 90s. To overcome these problems, the concept of Demat Accounts came into existence.
The Demat Account opening process offers several facilities to the stock market traders at a nominal cost. Since there are numerous Depository Participants in the country, there exists an inevitable competition in the market that induces each one of them to offer the best services. It is all about the research that one does to end up with the best DP available. There are many facilities that one can avail using this service.
Sorting out the required documents and investment strategies can help in understanding the benefits better.
Facilities for Opening a Demat Account
Also Read: How & why Open a Demat Account?
The purpose of the Demat Account opening was to facilitate dematerialisation and storage of reading assets in the electronic form for easy access. Although there is no charge for opening the account, one has to pay a nominal amount for account activities and maintenance. Finding the best DP is the final bet for an investor who wants to reap the benefits of the stock trading market.
Electronic Storage Facility
The first and the essential facility that one gets after Demat Account opening is the electronic storage of all the shareholding certificates. One can dematerialise all his share and securities certificates and store them electronically in his Demat Account for online access.
This process allows investors to safeguard their shareholdings from the general threat of fake and forged certificates. Also, the possibility of loss and theft of these documents diminishes to zero. One can easily track the whereabouts of his holdings through the account statements.
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The SEBI (Stock and Exchange Board of India) made it mandatory in 2011 for all investors to sell their shareholdings in the Demat form only. Also, investors must have a trading account for participating in the stock exchanges. Thus, Demat Account opening enables investors to trade online in the stock directly, without the help of any broker.
Access To Mobile Application and Web Portals
The Depository Participants offer access to their mobile applications and trading portals to the investors who have completed their Demat Account opening process. These online facilities are best, handy, and convenient for enjoying easy access to the account and perform all the necessary activities. All one has to do is get the login ID and remember the password that they set.
E-transfer of Share Certificates
Earlier, traders had to rush to the post offices and courier services to transfer their share certificates to some other person in their circle or the buyer. However, Demat Accounts have eliminated this need by making it easier to transfer the files online. Just by acquiring the Demat Account number of their concerned buyer, they can send the certificates.
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Conversion of Mutual Funds Units
Most of the investors assume that the Demat Account is only for holding the stock market shares and assets. But thanks to the advancement of the depositories, now one can also convert the mutual funds’ units into the electronic form. The process is termed “Destatementisation” which allows the investors to store their mutual fund investments.
Serves as a Loan Collateral
The investors enjoy the benefit of using their Demat Account statements to pledge as loan collateral. Since the account balance has a monetary value in the market, the banks accept it as an appropriate asset. Therefore, availing personal loans at reasonable rates becomes easier for investors who have sufficient balance in their Demat Accounts.
The speed-e-facility or the internet-based facilities are the services offered by the NSDL through all the Depository Participants that help them conduct their market operations online. From transferring files to freezing or operating the account, everything is possible through the mobile applications and web portals offered by the DP.
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The trading portfolio is one of the vital services that help investors in evaluating their trading performances and create a presentable profile for themselves in the market. This service is offered by some of the leading and selected Depository Participants so one must check the availability before applying for the account.
With so many facilities on the go, Demat Accounts serve as the best companion and trading tool for the investors. However, the quality of these facilities and services depend upon the reliability of the Depository Participant. The better the DP one chooses, the higher are the chances of enjoying the best services!