Informative Report Of Demat Account – Top 10 Uses Of Demat

A demat account is essential to invest in stocks seamlessly and hold securities in a safe manner. It facilitates paperless transaction for buying, selling, and transferring securities from one demat account to another. It is possible to secure a loan by pledging the securities that you hold in your demat account. There are many other features and benefits of opening a demat account. The top 10 uses of a demat account have been highlighted below for your reference:

1. Easy trading 

A demat account helps you to monitor the movement of stocks online. It is also directly linked to a trading account. Therefore, it facilitates an easy trading procedure if you are interested in buying or selling shares. 

2. Dematerialised securities 

As per the guidelines of SEBI, you can transfer the securities from one demat account to another only if they are available in dematerialised form. You may also dematerialise physical share certificates by using a demat account. 

3. Reduction in risks 

As the securities are held in digital form in a demat account, there is no risk of theft or damage. You also need to spend for storage and maintenance that are much essential if the securities were in physical form.

4. Quick transactions 

A demat account India facilitates quick and seamless trading transactions. It means that you can buy and sell securities through a demat account without wasting any time. 

5. Dividends and corporate benefits 

The shareholders get notified about the dividend, stock split, and other corporate actions and benefits through their demat account. Many companies transfer the refund or dividends directly to your bank account but some of them may also transfer the amount to your demat account directly. Also, bonus issues and stock splits get reflected in your demat account directly. 

6. Tracking performance 

A demat account reveals many vital details about a stock like its company, P/E ratio, RoE, etc. It also allows you to track the performance of the stocks in which you have invested in. The trading platforms have intuitive tools to evaluate the growth or deterioration of your stocks in percentage. They also provide other metrics that are essential to analyse the worth of stocks. 

7. Loan against securities 

If you hold sufficient shares or securities in your demat account, you may also avail a loan against them. You will be eligible for the dividends, bonus issues, and other corporate benefits even when your shares are pledged for obtaining a loan. 

8. Important trends and news 

Any significant updates about the companies in which you have invested can be checked through a demat account. Companies usually announce their decisions or other important updates for the benefit of the shareholders. These announcements and news can be checked regularly through a demat account. 

9. Freezing a demat account 

If you want to avoid credit or debit of money or any transactions in your demat account for a particular period, you can freeze it. 

10. Owning multiple demat accounts 

Owning multiple demat accounts for trading is also possible. It can help you to trade in different market segments without any confusion. However, each demat account will attract different demat account charges and brokerage. Therefore, you should be able to take these things into account before opening multiple demat accounts. 

Due to these benefits and uses, it is imperative to get a demat account for trading. However, you must get sufficient knowledge about stocks and other securities before you commence the trading activities. You can also refer to books written for share trading for beginners to acquire sufficient knowledge about the market and different financial instruments.

Read also:- WHY ARE INVESTORS REQUIRED TO OPEN A DEMAT ACCOUNT?