Demat account: You must know these facts
It is necessary to open a demat account in case you desire to sell as well as purchase shares by means of stock exchanges within India. Shares that are retained in the form of certificates are able to be sold as well as bought. In case you happen to be a newbie investor or existing one you are needed to operate a demat account. As per the rules of the market regulator, there is no paper form of shares in existence,and hence it is necessary for a trader or investor to have a demat account to have trading or investment in the share market. There are only two institutes that are permitted with the opening of a demat account,and hence one can get a trading account opened with any broker,but the demat account canbe opened with CDSL or NSDL only.
Nevertheless retaining shares in physical form involves need of a large number of documents as well as signatures you better to maintain a demat account. It does not take more than a minute to complete the process and additionally be aware ofguidelines for customers. Below are enumerated a few benefits of a demat account.
In demat account no possibility of stealing or robbery
In the demataccount, there is no probability of stealing of the certificates and after that forged because now your shares are held in electronic format. It does do away with dangers confronted formerly when your shares were retained in physical form. It can be said to be the prominent benefit of running the best demat account in India first of all.
Instant transfer of shares
Previously it was the practice to send shares to a registrar or some company so that shares could be transferred on the name of the investor. It would take months,and in the process sometime the certificates would get lost. It cannot take place in these days because shares are retained in electronic format in a demat account and are able to be transferred instantaneously.
Now there is no stamp duty
Now investors have to pay transaction tax for securities and no requirement to buy physically stamps for share transfer and attach them next to bottom as was the practice formerly. All process pertaining tothe physicalform of shares was burdensome,and the investor was required to buy stamps for share transfer from the stock exchange in the absence of the demat account.
Now one share can be sold
Previously, it was not possible for individual shareholders to sell odd lots of shares. Such as, it was very tedious to sell 33 shares also sizes which were found in odd numbers and could not be traded as it was easy with 50,100,200,etc. Now the practice exists no more,and you can sell now only one share.
Possibility of nomination
Now it is possible to nominate persons when you go for a demat account. It could not be done formerly when share certificates were found in the physical form. In those days a joint holder was needed. Do introduce a nominee in your demat account.