Why do we need a Demat Account?

Definition

Demat Account means Dematerialised account. This is an account of your bank account which keeps the record of your investments in electronic format. The certificates of your investment in different securities like shares and bonds are being maintained in this account.

Opening a demat account is similar and easy to open a bank account. This happens in a short time and once done, you are free to trade from any corner of the world.  Online trading is not possible without having a demat account. It has become very essential to have a demat account for the future users of the trading robots like the Crypto VIP Club, Ethereum Code, Qprofit system, Bitcoin Code.

The benefits of a demat system are:

  • It is very convenient to hold securities in a safe form.
  • Immediate transfer of securities becomes possible.
  • There is no stamp duty on transfer of securities
  • Safer than paper documents, the risk in these have been eliminated.
  • Reduced transaction cost for securities trading
  • Change in address and details of accounts gets stored with all the investor’s companies where he holds shares or bonds.
  • Transmission of securities is possible just through online mode without special notifications
  • The same demat account can be used for equity and debt instruments.
  • Traders can work from any corner of the world.

What are the documents required for opening a demat account:

  1. PAN Number ( permanent account number)
  2. Bank Statement ( last 3 months)
  3. Address proof
  4. Income tax return
  5. Color photographs
  6. Bank crossed cheque
  7. KYC Details( know your customer)
  8. Nationality identity proof

How can a demat account prove to be different from normal accounts?

When you are an active trader, having a demat account is compulsory. For those who have this type of an account, the transactions are more easy and secure as there is no third party intervention to create any hindrance. Keeping an account of what you do in trading becomes simple and clear similar to using an online bank account.

The problems associated with using physical share certificates are also avoided when you use this type of a  de mat account. Examples could be signatures mismatches, delay in postal delivery of share certificates. It also avoids the forgery issues and damage of the share certificates as everything is done electronically there is more of a credibility in this.

Conclusion:

To have  a demat account is anyday suggested to be the best solution for all the trading discrepancies we face.