It was some decades before that demat accounts were brought in practice in India ahead of which securities, as well as shares, were held in physical form. Now the securities are able to be retained in electronic format by way of a demat accounts. By it the whole process of retaining, investing, scrutinizing, and perform trade quickly, simply, and economically.
Characteristics of a demat account
The term Demat is not much known to the people who are not aware of the stock market. However for those who deal in this market, this term is very common, and people also know how the account works as well as what are the benefits one can have if he has a demat account.
Shares can be transferred easily
Investors are in a position to transfer the holdings by way of DIS – delivery instruction slip or through RIS – receipt instruction slip for the purpose of the selling or purchasing shares. With the help of these slips, users can offer all needed information that shall be needed for carrying out a deal effortlessly.
Quick materialization and re-materialization of securities
Holders of the Best Share Broker in India are able to proffer directions to the DP – depository participant to cause conversion into electronic format of the physical certificates. On the other hand, you are able to carry out reconversion of these electronic securities into physical form, in case need arises.
Pledging facility so that to get a loan
A lot of lenders do offer loans in lieu of securities which are retained by way of a demat account of such borrowers. Such holdings can be utilized as collateral in order to get the benefit of the loan by the holders of the demat account.
Can freeze the demat account
Holders of the demat account are able to freeze the accounts for a given time if they think necessary. Account holders are in a position to avail advantages of this arrangement to put a check to unwanted credit or any debit made to their demat account. The option of freezing can be utilized for a particular volume of the securities retained in your account.
Various accessing options
Demat accounts can be run by means of electronic format by which it is meant that they are able to be accessed by making use of manifold modes. You are in a position to access such accounts by way of the internet by bringing in use of smartphones, a computer or various other devices.
It is the NSDL – the national securities depository that permits users to convey instruction slips in electronic form in place of submitting them in physical form to the depository participant. In this way, the entire process is rendered very easy and less time taking.
Corporate advantages and actions
In case the companies proffer refunds, dividends or interest in favor of the investors, all such benefits become automatically obtainable to the holders of the demat account. Additionally, corporate actions such as stock split, bonus issues, and right shares get automatically updated within these demat accounts held by shareholders.
Published by sandeep Malik