What Are The Advantages Of A Demat Account For Investing In The Stock Market?

By Author: Neha Sharma
Total Articles: 108

The stock market is an ideal place to invest your money and gain a lot in returns. While this process may seem simple, it involves a lot of paper work and stock certificates. However, with a demat account, this process is simplified. In this article, we give you the advantages of investing in the stock market with this account.

Better Features
Previously, there used to be a large amount of paper work and delayed communication with the depository participant involved when investing in the stock markets. This resulted in a lot of complications which led to loss or damage of stock certificates, forgery and theft of shares, and delayed communication between the depository participants and the investor which led to loss of investment returns. All these problems where overcome with the demat account. This account allows investors to use an online trading account, which does not require the use of any physical paper work and has a faster communication channel with the depository participant to buy stocks. This improvement of the previous system has helped eliminate a lot of paperwork and improve the efficiency of the stock market too.

Anytime and Anywhere
This online trading account can be accessed anytime and anywhere. Investors need not visit the stock market repeatedly if they can access is from an omnipresent mode of channel. If the investor conducts a transaction he will do so through the demat account and the depository participant will take note of the transaction details. Even if the investor has bought a single share in a company, it will be recorded in the account, which would have not been possible previously. This process thus eliminates the need to contact each and every company in which he holds shares and also reduces the paperwork involved.

SoleOwner of the Stocks
With any transaction that involves buying, selling, splitting, merging or consolidating of shares or securities, it automatically gets credited in the demat account. Since you are the sole owner of your own account all the shares and securities that are credited to your account makes you the legal owner of it. Thus, if you need to buy or sell shares at any moment, you need to only inform the depository participant and proceed with the transaction.If you have availed of any non cash corporate entitlements like rights and bonuses from the depository participant, it will be directly credited to your account

Other investment ventures
With this kind of online trading accounts, you can not only keep it to store equity shares but other investment ventures. These investment ventures can also include mutual funds, gold exchange traded fund, preferential shares etc. This account for demat makes it easier for investors to keep track of all their investments in one account as compared to having several accounts for each separate investment portfolio.

Author Bio :- Neha Sharma is a finance student who loves to write during her spare time. She is delight to share relevant information about the online trading account like the demat account to those who are interested in investing in the stock market.