Why Is It Essential To Open A Demat Account For Investing In Shares?
Scores of financial planners have taken advantage of the booming stock market and many continue to do so. A recent Economic Times report stated that on March 31, 2018, approximately 3.76 million new demat accounts were opened breaking the previous record of 3 million back in the year 2007-08.
In case you too want to enjoy the benefits of investing in stocks, you can do so by opening up a demat account.
Why is it Important to Open a Demat Account?
A demat account, trading account, and a bank account are the three things that you need to start investing in shares. A demat account is very closely associated with a trading account. A demat account without a trading account would be just another account created for holding securities in the digitized form. While you use the trading account to invest in IPOs, stocks, and mutual funds, you would need a demat account to hold the securities.
The benefits of a demat account have been discussed in detail down below.
Security Holding Made Easy:
It is quite a tedious and difficult job to maintain and keep track of physical certificates and continuously monitor how they are performing. A demat account makes it easy by allowing the users to store and monitor the investments from a single account.
Less Risk:
There is a lot of risks associated with physical securities like damages, losses, and theft. Moreover, fake securities, as well as bad deliveries, also pose a potential risk. These risks can be done away with completely by opening a demat account. This particular account allows the holders to keep the investment in the digitized format rather than physical securities which cannot be damaged or stolen.
Reduces Costs:
Physical certificates come with associated costs like handling charges, stamp duty, and many other such expenses. These expenses will be completely eliminated if you have a demat account where the investments are maintained in a digitized form.
Less Time:
Given that investments are maintained in a digital form in demat accounts, there is no need for paperwork, which results in reducing the total time taken to complete the transaction. The reduced time allows the user to invest more with greater efficiency.
New Offers:
Stock brokerage firms keeps giving out new offers on dmat accounts to attract potential customers. All you have to do is to keep an eye out for such offers that can be profitable for you.
For example, Angel Broking is currently offering Rs. 15 flat brokerage order size up to Rs. 50,000 and Rs. 30 flat brokerage order size above Rs. 50,000 with their Angel iTrade plan. Apart from this you will also be able to open a free demat account under this scheme and start trading within one hour.
Leverage requirements guideline
Demat accounts are essential for investing in the stock market and is simple and easy to use. Having a demat account is a basic necessity for investing in shares.
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