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Importance and Usage of a Demat Account in Stock Market

If you are planning to invest in the stock market, the first thing you would need is a Demat account. The role of a Demat account is paramount in the stock market. As it is an element that ensures seamless execution of stock-related. Transactions between the stock exchanges and investors.
In this article we will discuss why demat account is so necessary. And what is the importance and uses of a Demat account in the stock market.
Whether you want to invest in Initial Public Offerings (IPOs). Buy shares, trade-in stock exchanges. But having a Demat account is necessary. As this is what paves the way for all stock-related transactions. Let’s find out more about Demat account. It is necessary to open the best Demat account in India to get the best features and services. 

What is a Demat (Dematerialisation) account?

Investment in equity shares in a physical version, the entire process is very lengthy. Also, it involves a painful paper work along with the risk of receiving fake shares. In a bid to keep the experience easy and rationalized, a demat account is need. During online trading a demat account is use to contain shares and securities. In materialized/electronic format. In a materialization process your share certificates transformed from physical. Form to digital format soono augment their accessibility. This is where the Demat Account number becomes necessary to trade off stock trades .
 

Why shares are keep in an electronic format?

It is quite simple as maintaining shares. In paper format is very lengthy and involves huge amounts of paperwork. Also, this tends to present a high risk of receiving fake shares. 
To prevent treachery and fraudulent activities in the stock format. It is necessary to buy and sell shares in an electronic format. This is where the role of a demat account emerges. 
Various facilities provided by a Demat account

Share Transfer

A Demat Account is use to transfer share holdings of a stock investor. It can be Carrie out by using a Delivery Instruction Slip (DIS) to perform stock trading. You can fill all the related data in that slip for a quick process.
 

Loan service

All the securities in Demat Account can be use to avail of different types of loans from the bank. You can use the accumulated securities as collateral to get a bank loan.

Dematerialization & rematerialization

According to the top brokers in India. If you have a Demat Account. then the transformation of the securities into diverse forms becomes easy. You can give important instructions to your depository participant (DP) to materialization. I.e. to get the corporeal share certificates changed into electronic format. Contrariwise, you can get the electronic securities. Transformed back to the physical form as per your needs.
Many admittance options
Given the feasibility of electronic operation. A Demat Account can be retrieve using various types of media. You can perform investing, trading, inspection. And other security-related activities using the internet, mobile, tablet, or other handheld devices.

Corporate activities

Possessing a Demat Account can help you access the benefits related securities. If a company gives out dividend, interests, repayments to share holders. Other demat account users also get this benefit by default.

Freezing Demat account

Any user can freeze and unlock their demat account as per their need for such a fixed duration. How to open a Demat account?
Please follow the given steps to open any Demat Account:
  • Choose a Depository Participant (DP). Or stockbroker who would help open a Demat Account.
  • Then, fill a Demat account opening form. Along with a passport-sized photograph. Photocopies of the asked documents like proof of identity and address. Having a PAN card is mandatory to move further. Don’t forget to carry the original documents along for verification.
  • In the case of an In-Person Verification. A representative of the chosen stock broker. Would verify the details mentioned in the account opening form.
  • Once time your application is process.
  • you would receive an account number/ client ID from the DP.
  • These details would be need to access Demat Account online.
  • When you become a demat account holder.
  • You will be ask to pay an annual maintenance fee for the maintenance of your account.
  • Besides, you will be charg a specific charge for the buying/selling  of shares via your Demat Account.
  • You are able to open a Account even when you don’t have any shares. Also, there’s no command to uphold a smallest balance.

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