What is Demat Account ?
Demat means De-materialization of Shares. In this process by which the physical share certificates are converted into equivalent number of securities in electronic form and are credited into Demat Account. This is the simple way to understand Demat.
Another way to understand it in simple lay man language is as follows :
Just like Bank account is for keeping money / cash into it. so in a similar way Demat account is for keeping shares and securities in it.
Demat account is the account in which securities such as Shares, Gold ETF's, Exchnage Traded Funds, Unit's, Bond's etc. are kept in a electronic form & all transactions of these securities are performed thru that account.
Demat accounts are safest option to keep you shares and all related securities, it is just like a locker, but in electronic form, where no physical things can be kept. It is safest because keeping shares & all securities in Demat are more safe as compare to physical or paper form, physical certificates having a risk of theft, torn due to age, burn in case of fire, and get lost due to flood or handling etc. even one of the very important fact is bad delivery due to signature mismatch or date /time of delivery etc. when you sell your shares. Demat transaction cost is much less compare to physical transfer of share certificates. Demat helps for hassle free, smooth & easy working.
What documents required for opening an Demat Account
1) PAN Card
2) Address Proof
3) Savings Bank Account
4) Photograph
There are 1000's of Demat services providers are available and are at very competitive rates without any hidden cost.
Benefits of Demats Services :
a) De-materialization
b) Execution of market and also off market trades of securities
c) Re-materialization
d) Facility to convert Mutual Fund Units into Demat
e) Pledge of securities
f) Facility of IDeAS to get Internet based Demat Account Statement anytime
g) Facility of Speed-e service
h) Transaction details thru SMS
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