Demat and Benefits of having Demat account

Demat is a form of holding or keeping securities in an electronic form. This is a legal alternative to holding the securities in paper form.

Benefits of having a Demat account

The benefits of having a Demat account are:

  • Immediate transfer of securities.
  • No stamp duty on transfer of securities.
  • Elimination of risks associated with physical certificates such as bad delivery, fake securities, etc.
  • Reduction in paperwork involved in the transfer of securities.
  • Reduction in transaction cost.
  • Ease in case of a change in address/bank account details etc. as update done in Demat account is communicated to all the respective companies eliminating the need to correspond with each of them separately.
  • Ease in Transmission of securities as the entire process is done by DP eliminating correspondence with companies.
  • A convenient method of consolidation of folios/accounts.
  • Holding various types of securities like Equity, Debentures, Bonds, Government securities, Sovereign Gold Bonds, Mutual Fund Units etc. in a single account.
  • Automatic Credit of Shares, Mutual Fund Units etc., arising out of split/consolidation/merger etc. into the Demat account.
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Author and Assistant Professor in Finance, Ardent fan of Arsenal FC. Always believe "The only good is knowledge and the only evil is ignorance - Socrates"
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