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Buying or selling shares used to involve calling your broker or sending a request in the mail. Shares were kept in physical form, clearing took several days, and fraud, forgery, or impersonation were always possibilities. All of this changed with the introduction of online Demat accounts in Indian marketplaces. Read on to learn about the different advantages of Demat accounts.
1.No paper certificates
Shares were originally issued on paper, but with the introduction of Demat accounts, they are now digitally represented and exchanged online. Investors who had previously acquired shares were stuck with several certificates reflecting those shares. There was a considerable risk of these copies being lost or damaged, and the transfer procedures were lengthy. The introduction of a Demat account automated the entire process, saving a great deal of time and work.
2. Easy Holdings
There is no limit on how many shares can be stored in a demat account. Investors can easily track your stock holdings and make major moves, and demat accounts can also be utilized to transfer shares quickly.
3. Cost-Effective
Physical trading incurs additional charges, such as handling fees and stamp duties, which can be unpredictable. An online Demat account eliminates these hidden costs, leaving you with only straightforward and upfront brokerage fees. Choosing bargain brokers will help you save even more money, making Demat accounts an affordable option for today’s traders.
4. Corporate gains
Demat accounts are automatically updated to reflect bonus issues, stock splits, and right shares from firms. This ensures that refunds, interest, and dividends are credited to your account on time. This automated tool improves the convenience of your online trading experience.
5. Time Saving
When you open demat account, it facilitates the purchase and sale of shares while increasing share liquidity. Furthermore, the process of transferring shares has undergone tremendous improvement.
6. Easy tracking.
Demat accounts not only make it easier to track physical documents, but they also eliminate the need for manual record-keeping because all of your documents, including investment information, are saved on a secure server.
7. Nomination
A Demat account also allows you to nominate a beneficiary. Nominations must follow the processes set by the depository. In the event of the investor’s death, the account shares will be transferred to the designated beneficiary.
8. No TDS or Demat Securities
The Central Board of Direct Taxes (CBDT) has waived tax deduction at source (TDS) for demat account payments and interest on bonds and securities. To open a demat account online, ensure your securities are listed on NSE and BSE and saved in the demat mode.
9. International transactions
Previously, it would have been difficult for NRIs to trade on Indian stock markets. However, with the various Demat account types available, this is now achievable. NRIs can choose between repatriable and non-repatriable Demat account types, and they can purchase or sell stocks on the NSE or BSE as needed.
Conclusion
If you intend to open a demat account online in the near future, you should learn as much as you can. In general, a demat account holder receives incentives such as assured earnings on their shares. So, why wait? Open Demat account is a helpful solution that removes the hassles of physical trading.