Demat account stands for dematerialised account. They are usually opened by an investor when they are registering with a sub broker or an investment broker. It implies that the shares and securities are held or taken possession off not by the investor physically but electronically in a dematerialised account, that is, a demat account.
In simple words it is an electronic savings account found in India.
Advantages of a demat account-
• A major benefit of using a demat account is that instead of holding shares on paper, one can save all their shares in electronic form and keep a track and account of them with less fear of losing the records or theft of stocks etc.
• Storing records electronically, reduces the difficult task of handling heaps of stock certificates as well.
• A demat account is also considered as an absolute must when it comes to trading in stocks and ETFs.
• Another plus point of a demat account is that it does not attract stamp duty.
• The investor becomes the legal owner of the securities once it is credited to the person's account and there isn’t any requirement to pass it through the company's registrar.
How to consolidate a demat account?
The account holder requires to pay a visit to the DP office or branch and submit the necessary forms and documents if he wishes to consolidate his demat accounts.
He will require a delivery instruction slip or DIS. It is like a cheque leave that sanctions transfer of securities from one demat account to another. This DIS needs to be filled in and signed before it is handed over to the depository participant’s office.
Benefits of consolidating demat accounts:
Having separate or multiple demat accounts implies that one has to incur a large fee with every transaction made. But if the accounts are consolidated, the transaction fee for a single account is not much. This way a person can save up on annual fees and charges on several demat accounts.
Dealing with multiple accounts means dealing with a lump sum of paperwork. This hassle free task can be taken care of with the consolidation of demat accounts. This eventually also makes tax filing easier.
Consolidating demat accounts is extremely easy and simple.The entire process becomes an off-market transaction and all that is required is a delivery instruction slip or a DIS which includes the details of the transfer value and the destination account.
If a broker has only one account with a DP, only a single request form is needed. Joint accounts require that this slip be signed by all owners. Many DPs usually charge fees for transfer of securities. A major benefit of joining accounts in the name of a single person is the tax exemption one can apply for.
Consolidating demat accounts will prove to be quite beneficial in the long run and should be considered to make transactions more efficient.
In simple words it is an electronic savings account found in India.
Advantages of a demat account-
• A major benefit of using a demat account is that instead of holding shares on paper, one can save all their shares in electronic form and keep a track and account of them with less fear of losing the records or theft of stocks etc.
• Storing records electronically, reduces the difficult task of handling heaps of stock certificates as well.
• A demat account is also considered as an absolute must when it comes to trading in stocks and ETFs.
• Another plus point of a demat account is that it does not attract stamp duty.
• The investor becomes the legal owner of the securities once it is credited to the person's account and there isn’t any requirement to pass it through the company's registrar.
How to consolidate a demat account?
The account holder requires to pay a visit to the DP office or branch and submit the necessary forms and documents if he wishes to consolidate his demat accounts.
He will require a delivery instruction slip or DIS. It is like a cheque leave that sanctions transfer of securities from one demat account to another. This DIS needs to be filled in and signed before it is handed over to the depository participant’s office.
Benefits of consolidating demat accounts:
Having separate or multiple demat accounts implies that one has to incur a large fee with every transaction made. But if the accounts are consolidated, the transaction fee for a single account is not much. This way a person can save up on annual fees and charges on several demat accounts.
Dealing with multiple accounts means dealing with a lump sum of paperwork. This hassle free task can be taken care of with the consolidation of demat accounts. This eventually also makes tax filing easier.
Consolidating demat accounts is extremely easy and simple.The entire process becomes an off-market transaction and all that is required is a delivery instruction slip or a DIS which includes the details of the transfer value and the destination account.
If a broker has only one account with a DP, only a single request form is needed. Joint accounts require that this slip be signed by all owners. Many DPs usually charge fees for transfer of securities. A major benefit of joining accounts in the name of a single person is the tax exemption one can apply for.
Consolidating demat accounts will prove to be quite beneficial in the long run and should be considered to make transactions more efficient.
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