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Demat Account – A Brief Introduction


Many people are enthusiastic about the concepts of shares and stocks but it is very important to know about all the aspects prior to proceeding.



Demat Account is also termed as dematerialized account providing the opportunity of possessing securities and shares in electronic form. In times of online trading, shares are purchased and possessed in a demat account and through this way facilitating the easy trade for the users.

A Demat Account possesses each and every investment a person makes in government securities, shares, bonds, mutual funds, and exchange traded funds in one place.

Demat accounts have started its journey in the year 1996 in India. Before its introduction, securities and shares were issued and traded physically. Now, such securities are available to possess electronically via Demat accounts. It has made the complete procedure of investing, possessing, monitoring, and trading, convenient, faster, and budget-friendly.

Demat Account – Features

Easy Transfers of Share: Investors are able to move their holdings via a DIS (delivery instruction slip) or RIS (receipt instruction slip) for purchasing or selling shares. Such slips permit users to offer each and every detail that is needed for implementing a transaction in a smooth manner.

Faster Dematerialization and Rematerialization of Securities: The holders of demat account can offer instructions to their DP or depository participant to transform physical certificates into electronic format. On the other hand, electronic securities may also be reconverted to physical format (if needed).

Pledging Provision for Availing Loan: Numerous lenders offer loans against securities possessed in the borrowers’ Demat account. Such holdings are utilized as collateral for availing loans by the account holders.

Freezing Demat Accounts: Demat account holders can also freeze their accounts for a definite timeframe (if needed). The particular option might be advantageous incase one wishes to check unexpected credit or debit into the Demat account. The particular freezing option is available for a particular quantity of securities possessed in the account.

Multiple Accessing Alternatives: The operation of demat accounts happens electronically that signifies these can be accessed by utilizing multiple modes. Such accounts can also be accessed via the Internet with the utilization of a smartphone, computer, or smart devices.

SPEED E-Facility: NSDL or National Securities Depository Limited permits users to dispatch instruction slips electronically rather than physically submission of the slip to the DP. It has made the approach less time-consuming and more convenient.

Corporate Advantages and Actions: If the businesses provide refunds, dividends, or interest to their investors, such benefits are available automatically to the Demat account holders. Additionally, corporate actions including right shares, bonus issues, or stock split are updated automatically in all the shareholders’ Demat account.

Demat Account – Benefits to investors 

Secured than aPhysical Certificate:

It is safer, as compared to possessing physical certificates because it removes the fraudulent activities, the risk of loss, or any trade not going good.

Can Sell One Share Only:

The shareholder can even sell one share from its holding very appropriately, that was not possible prior to the appearance of Demat Account.

Other benefits include flexible workplace, reduced cost etc. For more information, you can refer to the reliable internet resource or can also contact an experienced professional in this field.
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