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Demat is the best form of account

Any company that is registered on a stock exchange it is obligatory on it to provide the securities in physical as well as dematerialised form. By the term physical securities is meant actual certificates that impart information regarding the shares pertaining to a company that a person owns. Similarly, on the other hand, dematerialisation is said to be the procedure of changing physical shares that is share certificates in the form of electronic one. Once you convert shares into the dematerialised form, they are necessarily held in the demat account. Nowadays, most of the trading of shares takes place by means of a demat method of shares. With the change of technology and time, the demat form of shares is more welcomed than the physical copies,and hence the authorities also have now made it compulsory to have the shares in Demat form only.

Definition of demat account

Demat is the short form of the word dematerialise. This means that the shares provided to the buyers are no more in the paper form as they need to be changed frequently and hence one can get them in adematerialised form where the shares are just numbers and images that can be parked in a Demat account as a part of the SEBI guideline.

You can say that a demat account is comparable to a bank account. In case of bank accounts, you hold money using electronic form while as you hold shares in the demat account through electronic mode. Every kind of selling and buying of shares takes place by means of the demat account. SEBI – the Securities and Exchange Board of India has made it mandatory to hold a demat account if share trading exceeds 500 shares.

Among people now financial awareness is growing, so more and more individuals today try their hands at the share market to derive financial benefits. It is essential to comprehend the fundamental requirements that are needed for trade in shares and opt for a best demat account in IndiaAs per the authorities, there are only two institutes that can offer the demat account which are known as NSDL and CDSL.

Use of such an exclusive account

If you use the demat account, you should not worry about share certificates that are mutilated, delays due to postal problems and fake shares. It is proven that the demat account is the easy and secure mode of holding securities as bank account is meant for funds. There are DP slips like cheques with the help of which the shares can be moved from this account.

Benefits of a Demat account

On the contrary to the former mode of dealing in physical certificates and dealing with delays in transactions, trading and holding of the demat account has below-given benefits.

There is a settlement of securities that are traded by means of the exchange and transactions made off-market.

In the physical mode of certificates, there were many factors as thefts, delays in transfer, risks as fraudulence, late delivery, etc. that impeded the process of trading.

Due to shorter settlements, liquidity is enhanced.

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