To buy or sell shares via stock exchanges demat accounts are a definite must. Shares held via securities can be sold. If you happen to be a new investor, then opt for the best demat account in India. Just about a lot of documents are involved, opening of a demat account is of definite help. Being aware of customer guidelines it is a onetime procedure. Let us spell through the major benefits of a demat account.
Robbery and theft reduce diminishes with a demat account
Since shares are held in electronic form no chances of your shares being forged or stolen. When shares were held in physical form this was a risk posed. This does showcases to be a major benefit of demat account
Transfer of shares takes place electronically
Earlier in order to get a shares transferred you had to send it to the company or a registers office. A lot of time was taken and shares could be lost. In demat form this does not happen and shares are transferred instantly.
On transferring securities no stamp duty levied
When you are paying a transaction tax, no need to incorporate share transfer stamps. Earlier you had to paste them below the certificate. This process was a time hassle and to purchase such stamps you had to visit a stock exchange.
You can even end up selling a single share
In the days gone by you would have to sell shares in lots. The denominations are 50, 100 etc. and if you wanted to sell 33 shares it was not possible. These trends are eliminated and you can end up selling even a single share in the market.
Nomination is possible
When you are opening a demat account you can nominate an individual. This was completely different from the earlier days where you had share certificates. Just check out whether you have added a nominee to your demat account.
A single account operation is possible
No need to operate separate accounts for various trade investments. Apart from certain fixed deposits of companies all dealings can be done via a demat account.
Right shares or bonus can be credited in an instant manner
Both these components can be transferred instantly and there is no need for any share certificates.
Opening of a demat account
In order to open up a demat account approach a DP. They act as a liason between an investor and a depository. In order to open an account you need passport size photographs and a valid identification document. Once you submit these details it take a couple of weeks for a demat account to be open.
Charges tend to vary as per levied by DP. In most cases there is a nominal fee involved. Some banks are not going to levy on charge in opening up a demat account. In addition to opening fees some do levy an annual maintenance charges on the accounts. This charge does vary as per the volume of transactions.