Advantages of having a Demat Account
In India, if an individual wants to purchase and also sell shares, then a demat account opening is mandatory through the stock exchanges. If the shares are possessed by the means of certificates, then it can be bought and also sold. If anyone is an existing investor or a newcomer, then opening one demat account is nearly compulsory. So, if there are lots of signatures and documents are involved, then it is the best idea to open a demat account. This is only a kind of one-time procedure, particularly to go through the customer guidelines. Some advantages of demat account opening are discussed below:
- Robbery or Theft Chance is Nil in Demat Account: No chance is involved with anyone’s certificate for being stolen along with forged later as shares are possessed in electronic form. It eliminates the earlier day’s risk when the shares were possessed in physical format. It is one vital advantage of the fast opening of a demat account.
- Shares Transfers can happen Immediately: In previous times, shares must be sent to particular registrar or company for getting the shares transferred on the specific person’s name. It took a long time and sometimes those certificates were lost. The same incidents can’t occur today as a demat form. As a result, shares can be transferred immediately. If you are searching for Best Demat Account in India, then go for some popular websites.
- No Stamp Duty for Securities’ Transfer: If an individual pays one security transaction tax, then it is not required to physically buy the share transfer stamps. After that, paste those below the particular certificate as like earlier. So, earlier the process was cumbersome without demat and frequently, people had to go to the stock exchange for purchasing the share transfer stamps.
- Elimination Odd Lots: Previously, the individual shareholders were not able to sell the share with the odd lots. As an example, a difficult task was to sell 33 shares along with sizes of odd. They were not regarded as the marketable lots, such as 50, 100, 200 and so on. It has been eliminated now and thus people can sell a lot as per their choice because now, the market lot is 1 share.
- Nomination can be Possible Now: One can now choose to nominate someone during the account opening. This facility was not there in earlier when share certificates were present. At that time, one must have one joint holder. You should properly check along with your depository participant throughout the procedure for adding a nominee if it is not done.
- Single Account: One needs not to open one separate account to buy debt, such as NCDs, bonds, Tax Free bonds, and so on. Unlike certain debt instruments, such as bank along with company fixed deposits, a vast number of instruments could be possessed in one demat account.
- Instant Credit of Rights and Bonus Shares: These shares can be credited immediately and now, no need for waiting for the certificate also.
With the above-specified points, it will be easy for you to take a correct decision.