In the stock market, people deal in shares and other securities to fetch some profit. However, as every transaction is now computerized, there are many formalities that one has to complete. The most important among all is the demat account which is a must for all those who deal in this market irrespective of the type of trade or security. One needs to understand the use and utility of this account in the stock market before going for the same.
It is very necessary to open a demat account in case you desire to sell and purchase shares by way of Indian stock exchanges. All such shares that are retained by means of certificates are able to be sold or bought. In case you happen to be old or startup it is compulsory to have a demat account. Although in the case of certificates you have to go through a lot of paperwork and involves many signatures, it is better to open the demat account. You are needed to undertake the process only once specifically to know about the customer guidelines. Below are enlisted a few benefits of the demat account.
No threat of stealing & burglary Demat Account
You don’t have to worry about your certificates getting lost or stolen and after that forged because now the shares are retained in the shape of electronic format. By this way, the previously posed risks exist no more when it was practice to retain shares within the physical form. It can be counted as one among the major benefits of operating the Best Discount Broker in India in your first preference.
Instant transfer of shares is possible
Previously, it was the practice to send shares towards the registrar or the concerned company in order to make the transfer of shares in the name of any individual. It was the time-consuming procedure, and in the process most probably certificates got lost. It is not possible in the demat account format, and shares do get transferred instantaneously.
No need of stamp duty for transfer of securities
Now you are required to pay a type of security transaction tax; it is not necessary to buy stamps for share transfer in physical form and then affix them underneath the certificates as investors used to do previously. The entire procedure in the absence of the demat form was very burdensome, and you were needed to go to the stock exchange to get for yourself stamps required for share transfer.
One share can be sold now
Previously, it was not possible for individual shareholders to sell shares having odd lots. For instance, it was not easy to sell 33 sizes and shares which were found in odd and were not able to be marketed just as 50,100,200, etc. Such practice does not exist anymore now, and you are able to sell as a minimum one share.
The choice to nominate someone
It is now possible to nominate individuals as you happen to open the demat account. You could not do it previously when shares were held in physical form.
