Demat Account is a an to hold your shares and securities in dematerialized electronic form. A demat account is to your shares what a bank account is to your money. Simply put, it is the account that holds all your shares in electronic or dematerialized form. A demat account holds the certificates of your financial instruments like shares, bonds, government securities, mutual funds and exchange traded funds (ETFs).
Advantages of Demat Account :
- Easy and convenient way to hold securities
- Immediate transfer of securities
- Safer than paper-shares (earlier risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc. are mostly eliminated)
- Reduced transaction cost
- No “odd lot” problem: even one share can be sold
- Change in address recorded with a Depository participant (DP) gets registered with all companies in which investor holds securities eliminating the need to correspond with each of them separately.
- Transmission of securities is done by DP, eliminating the need for notifying companies.
- Automatic credit into demat account for shares arising out of bonus/split, consolidation/merger, etc.
A single demat account can hold investments in both equity and debt instruments. - Traders can work from anywhere (e.g. even from home).
Document Required to Open Demat Account
You need two things to open a demat account.
- PAN card (Mandatory)
- Address Proof
(Aadhar card ,Ration card, passport, voter ID card, driving license, bank passbook or bank statement, verified copies of electricity bills, residence telephone bills, leave and license agreement or agreement for sale) - Passport size photograph.
