BENEFITS OF OPENING A DEMAT ACCOUNT

Demat accounts were introduced in India in the year 1996, prior to which shares and securities were physically issued and traded. The importance of opening a free Demat account is such that it allows the investors to hold their securities electronically in their Demat accounts. This makes the entire procedure of investing, holding, monitoring, and trading, faster, convenient, and cost-efficient.

Benefits of a Demat account
These are some of the advantages of a Demat account:

1) Lower risks
2) Easy holding
3) Odd lots
4) Reduced costs
5) Reduced time

Lower risks:

Physical securities are risky due to thefts, losses, or damages. In addition, bad deliveries or fake securities pose further risks. These risks are completely eliminated with the opening of a Demat account, which provides holders with the option of holding all their investments in electronic form.

Easy holding:

Maintaining physical certificates is a tedious job. Moreover, keeping track of their performance is an added responsibility. Demat account holders can make it more convenient to hold and track all their investments through a single account.

Odd lots:

With physical certificates, buying and selling were possible only in the specified quantities. The convenience of dealing with odd lots or single security was also not available. Demat accounts eliminate this issue.

Reduced costs:

Physical certificates involved several additional costs, such as stamp duty, handling charges, and other such expenses. These extra expenses are completely eliminated with Demat accounts.

Reduced time:

Due to the elimination of paperwork, the time required in completing a transaction gets reduced. The reduced time requirement enables the account holder to make more purchases and sales of security holdings in a shorter time and with greater efficiency.

Demat accounts are simple, fuss-free and extremely lucrative. In today’s day and age, they are a must for financial planning.