Demat accounts were introduced in India in the year 1996, prior to which shares and securities were physically issued and traded. The importance of opening a free Demat account is
such that it allows the investors to hold their securities electronically in their Demat accounts. This makes the entire procedure of investing, holding, monitoring, and trading, faster, convenient, and cost-efficient.
Benefits of a Demat account
These are some of the advantages of a Demat account:
1. Lower risks
2. Easy holding
3. Odd lots
4. Reduced costs
5. Reduced time
Why do you need a Demat account?
The conversion of physical securities to electronic form is optional because an investor is allowed to hold securities either in physical or electronic format. However, monitoring of physical certificates is more difficult compared to its dematerialised counterparts.
Additionally, it is difficult to buy or sell securities in physical form. The number of agents dealing in physical shares, as well as the number of buyers willing to purchase physical shares, is much less as compared to the individuals transacting in dematerialised securities.
