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What is Demat Account & Why is It Needed?

A Demat account allows investors to hold their shares in an electronic form. With help of Demat you can digitally secure your physical Certification into Demat form. Here you know for the three major parties for Central Depository, Depository Participant, Investor or Demat account holder.<br>

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What is Demat Account & Why is It Needed?

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  1. What is Demat Account & Why is It Needed?

  2. Open Demat Account

  3. What is Demat Account? Where investor can hold there Physical Share certificate, Exchange traded fund , Mutual Fund or other financial document in digital / Electronic formats. With help of Demat you can digitally secure your physical Certification into Demat form. Demat is known as Dematerialisation. Its process of Transfer share certification from Physical to Digital (Electronic form) format.

  4. Why Open Demat Account? DematAccount holds all your physical certificate in to Digital format. It’s one type of your Bank account where you can save your certificate and other financial documents, Exchange traded funds in Electronics formats. When the shares and other securities are dematerialisation their account are kept and maintained in the Demat account of Depository Participants. DP is authorised by CDSL /NSDL to operate Demat Account. • Understand How Does Demat Account Works: There are three major parties in Demat Account • Central Depository • Depository Participant • Investor or Demat account holder

  5. Central Depository: In India there are two Central Depository – NSDL / CDSL • NSDL (National Securities Depository Limited) – managed by NSE • CDSL (Central Depository Securities Limited) – managed by BSE • Depository Participant: In India there are so many Depository Participant. Depository Participant work is provide linkage between Central Depository and Investor. DP could be a Broker , Bank or any Financial institution. • Investor or Demat account holder: Every Client has Unique client code or client ID. Its their identification number. Demat account holder use their Demat account with help of Depository Participant. • Read more: How Demat Account Works?

  6. Benefits of Demat Account? • No Risk of Physical Damaged of Certificate • Safer than paper-shares (earlier risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc. are mostly eliminated) • Immediate transfer of securities • Traders can work from anywhere (e.g. even from home) not required to visit broker office. • Easy to maintain Physical Shares • Reduced paperwork for transfer of securities • Easy and convenient way to hold securities

  7. Change in Address in one place and get updated in every company’s registrar records • No stamp duty on transfer of securities • Elimination of risk by loss, theft, mutilation etc. • Reduced transaction cost • Even one share can be sold no minimum lot required to share certificate • Transmission of securities is done by DP, eliminating the need for notifying companies. • Automatic credit into demat account for shares arising out of bonus/split, consolidation/merger, etc. • A single demat account can hold investments in both equity and debt instruments.

  8. CONTACT US Address :28, General Bank Chamber Opp Municipal Market Above kotak Bank C.G.Road ,Ahmedabad India Gujarat 380009 Phone :07940325797 Website : www.investallign.in

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