Before online settlement, there were many cases of fraud or copying of owners using forged documents, but after the introduction of demat accounts in the market, it became impossible to forge or copy the holdings.
A demat account protects your investments from fraud and reduces the risk of storage, theft, damage and malpractice. It also acts as a one-size-fits-all store for all your investments. This makes it secure and easy to use.
Moreover, it enables you to track and access all your investments in shares, government securities, exchange-traded funds, bonds and mutual funds from anywhere in the world under one account in electronic format. There are many advantages of having it. Let us understand it here.
10 Benefits of Demat Account
Protect Holdings
When you open a Demat account, your holdings are protected from loss due to wear and tear, misplacement or theft.
Protects Investments from Fraud
Before online settlement, there were many cases of fraud or copying of owners using fake documents, but after the introduction of Demat accounts in the market, it became impossible to fake or copy holdings.
Instant Transfer of Shares
Another advantage of a Demat account is that not only does it make transactions safe or easy, but settlement is also instant. Fast settlement also reduces the risk of fraud.
Instant Access from Anywhere
It is easy to buy and sell shares from anywhere in the world using your laptop or mobile.
Unlimited Shared Storage
You don’t have to worry about the amount of shares you have collected. You can also trade in small amounts and monitor the account online.
You can also get loans
Another advantage of having a demat account is that the securities held in your online account can be used to obtain loans from various banks. This can provide a lot of flexibility and convenience for those looking to get financing for different purposes.
You can update the account automatically
If there is any change in the stock in your demat account, such as bonus issue, stock split, etc., you will get an automatic update in your demat account.
Nomination is available
According to SBI Securities, in case of unforeseen circumstances, your demat account ensures that your holdings are safe, and the appointed nominee will receive the shareholding.
Reduction in transaction costs
The advantage of having a demat account is that you can enjoy low transaction costs, the fee is charged per ISIN, whether you transfer 1 share or 100 shares.
Eliminates Bad Delivery
In a depository environment, securities cannot be returned “under objection” for any reason, and hence the question of bad delivery does not arise, nor does the investor face any uncertainty about the securities purchased by him.