Demat account is a special account used for the purpose of keeping shares and securities dematerialized. Instead of physically carrying copies of the share certificates, one can hold them electronically. This makes it easier, more secure, and convenient to trade. Demat account is a must for every investor who wants to invest in the shares, mutual funds, or bonds.
How a Demat Account Works
Demat account functions similar to a bank account but rather than keeping money in it, it keeps shares and securities. When an investor purchases a share it gets credited to his demat account. When an investor buys a share it is added to their demat account. When they sell it, it is removed from the account. This process eliminates the need for a physical certificate and hence reduces chances of damage and risk of loss. Through a demat account you can easily trade and manage your investments online.
Benefits of a Demat Account
Some advantages of maintaining a Demat account with Religare are:
- Safe & Secure: Because the shares are digitally held, they cannot be lost or destroyed with physical share certificates.
- Simple to Use: It is easy to sell and buy shares in a couple of clicks, rendering investing stress-free and convenient.
- Instant transactions: Stock purchase and sale is instantaneous compared to the sluggish certificate process.
- More Choices to Invest: You can keep multiple kinds of investments such as stocks, bonds, and mutual funds in a single location.
Conclusion
Demat account is an easy way to manage investments without ever holding certificates. Those interested in purchasing shares and mutual funds must open a demat account with trusted brokers that makes everything even easier.