• HDFC securities
• 20 Dec 2022
• Benefits of demat account

Investing in the stock market is considered one of the most valuable methods of wealth creation. Not only can one earn returns on the capital invested, but the invested funds can be helpful in times of need as well. In order to invest in the stock market, an individual needs to open a demat account.

A demat account store shares digitally in a dematerialized format. There are several benefits of a demat account. Here are some of the advantages that a demat account offers.

Digitalization of documents

Previously, physical documents like share certificates were necessary in order to prove the ownership of shares. The physical documents were often lost or misplaced. A demat account solves this problem by completely digitizing share certificates and related documents. The shares are securely stored digitally, and there is no risk of losing the share certificate.

Saves time

One significant advantage of a demat account is the amount of time one can save. Individuals can quickly buy and sell securities through demat and trading accounts. The process of physically transferring shares consumed a lot of time and involved tedious paperwork, but demat accounts have made this process fast and convenient. Furthermore, with the help of trading apps, an individual can place and modify orders almost instantaneously.

Lower costs

When investing in physical bonds or share certificates, an investor needs to pay stamp duty and other related charges. One of the benefits of the demat account is that an investor can save these costs while investing through a demat account.

Ability to track investments

Among the many benefits of demat account, one that is especially helpful is the ability to track your investments. Investors can keep track of their investments easily as all of their investments are stored digitally. The lack of paperwork further simplifies managing the investments. An investor can also regularly monitor the performance of the investments and make decisions without any hassles.

Easy access

With the rampant growth and development in technology, investing has become easily accessible for many. One can open demat account in a matter of minutes with just an internet connection and a device to access the internet. Through mobile apps and websites, one can buy, sell, track and manage their investments anytime and from anywhere. This advantage of demat accounts has made it possible for people to get easy access to the financial markets and start investing.

Invest in multiple securities

One of the advantages of demat account is that one can invest in multiple securities with just one account. An individual does need to open separate accounts to invest in different financial securities. With a single demat account, one can invest in stocks, mutual funds, and bonds and even apply for Initial Public Offerings (IPO). All these securities are stored safely in a dematerialized format in the demat account and can be monitored at the same place.

Automatic Credit

Any dividend, stock split or bonus shares issued by the company whose shares you hold get automatically credited to your demat account.