Investing in the stock market is one of the best ways of growing your capital. The stock market is an essential tool to increase your money in the long term. It is also possible to make a sizeable earning by trading in the stock market. However, to invest or trade in the stock market, you need a Demat account.
What is a Demat account?
A Demat account is an electronic repository of financial instruments. Instead of holding physical copies of shares, bonds, debentures, mutual fund units etc. a demat account holds it all in electronic form. A demat account shows the number of units, the date of purchase, and the price at which the unit was purchased. It also shows the current value of the investment. Thus, a demat account can tell you the financial position of your investments at one glance.
Demat accounts also contain information about bonus issues or rights issues of shares. They also show partly paid and fully paid-up shares and debentures. Some demat accounts also give information about dividend paid or interest paid.
Features of a demat account:
• A Demat account holds the securities of an investor. When the investor purchases or sells any securities, they are credited or debited to his demat account
• Since all the securities are held in electronic form, it lowers the risk of theft and loss that was associated with physical securities.
• Selling securities through the Demat account can be done for odd lots or a different number of shares since order matching is completely electronic on the stock exchange.
• Demat accounts facilitate easy share transfers.
• Pledging shares for any purpose through the demat account is convenient. Some lenders offer loans against stocks and mutual funds by using this facility.
• It becomes easy to invest in debt instruments since they are automatically credited to the demat account.
It is important to remember that a Demat account itself is not enough to invest in the stock market. It is necessary to open a trading account, to carry out the purchase and sale of shares and other securities. A lot of brokers or depository participants will open a demat account and trading account for you. However, it is entirely possible to open a trading account separately from the demat account.
The best demat account in India for an investor is one that provides an accurate and thorough statement accessible to the investor and trader at all points of time. Having demat accounts that are completely accessible online will ensure a stricter control and faster decision making for the investor.
What is a Demat account?
A Demat account is an electronic repository of financial instruments. Instead of holding physical copies of shares, bonds, debentures, mutual fund units etc. a demat account holds it all in electronic form. A demat account shows the number of units, the date of purchase, and the price at which the unit was purchased. It also shows the current value of the investment. Thus, a demat account can tell you the financial position of your investments at one glance.
Demat accounts also contain information about bonus issues or rights issues of shares. They also show partly paid and fully paid-up shares and debentures. Some demat accounts also give information about dividend paid or interest paid.
Features of a demat account:
• A Demat account holds the securities of an investor. When the investor purchases or sells any securities, they are credited or debited to his demat account
• Since all the securities are held in electronic form, it lowers the risk of theft and loss that was associated with physical securities.
• Selling securities through the Demat account can be done for odd lots or a different number of shares since order matching is completely electronic on the stock exchange.
• Demat accounts facilitate easy share transfers.
• Pledging shares for any purpose through the demat account is convenient. Some lenders offer loans against stocks and mutual funds by using this facility.
• It becomes easy to invest in debt instruments since they are automatically credited to the demat account.
It is important to remember that a Demat account itself is not enough to invest in the stock market. It is necessary to open a trading account, to carry out the purchase and sale of shares and other securities. A lot of brokers or depository participants will open a demat account and trading account for you. However, it is entirely possible to open a trading account separately from the demat account.
The best demat account in India for an investor is one that provides an accurate and thorough statement accessible to the investor and trader at all points of time. Having demat accounts that are completely accessible online will ensure a stricter control and faster decision making for the investor.
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