The process of stock market investment has improved by leaps and bounds. Technology has helped investors to shift from traditional physical share certificates to virtual shares which they can store in their online trading platform known as the demat account. Moreover, modern brokerages even offer services for free demat account opening which has further reduced various limitations and bottlenecks concerned with starting the stock market investment journey.
Dematerialization or demat account serves as an online locker that investors can use in order to store various securities like shares, bonds, ETFs, mutual funds, and even government securities. Various investment assets can be bought and sold using an online demat account thereby making the process of investment easy and hassle-free. With limited paperwork, individuals can open a demat account using their smart devices.
Following are the important features concerned with a demat account which can help investors understand their importance:
- Buying and selling of virtual securities:
The demat account helps investors to buy and sell securities like shares and mutual funds and even securely store them in a virtual format. Unlike physical certificates, the demat account can help with the online storage of various investment solutions and assets in a completely secure and safe manner.
2. Hassle-free transfer
Apart from storage, the demat account can be used for hassle-free transfer of required shares, mutual funds, and various investment assets without any need for extra paperwork. One can easily place an order of buy or sell using their demat account which gets completed in a secure and regulated manner.
3. Easy access
Investors can easily access their demat accounts using their smart devices. Available in the form of applications, the demat account can be accessed without any kind of restrictions round the clock.
Advantages of opening a demat account
There are various benefits of opening and operating a demat account which has been enumerated below:
4. Safety and Security
The demat account helps with the safe storage of virtual shares and other investment assets which can be easily accessed, bought, and sold from any device from anywhere. Instead of holding shares in physical format as certificates, investors can open a demat account, buy the shares of a particular company, and store them in a completely secure manner.
5. Participation in the initial public offer
An initial public offer on IPO is the first time when the shares of a company are floated in the primary and the secondary stock market. By opening demat as well as a trading account, investors can participate in an IPO and they buy generate great returns from the same.
6. Complete control over investments
Demat account even offers complete control to an investor over their overall investment portfolio. With various types of assets like shares, debentures, mutual funds, bonds, and ETFs, investors can select the best investment option for risk diversification. Investors can manage their investment portfolio, make necessary changes, buy and sell securities, and thereby generate great returns through the use of a demat account.
Now you know what is demat account what is the use of it, it serves as the perfect solution for modern investors who wish to obtain complete control over their investments. With various inbuilt security features and other dedicated tools, investors can make sound investment decisions by opening and operating their demat accounts.