Home Business What is a Demat account and how is it useful?

What is a Demat account and how is it useful?

by Hanery Scott

Technology has made so many developments in our lives, many of which you can not even imagine. All these developments have made our lives easy. These developments also take the stock market under its scope. For a very long time like more than a hundred years, the traders and investors had to go to offline trading platforms to buy and sell their holdings. It was a very time-consuming process. Whether you wanted to buy shares or sell shares, it used to take up to one week to complete the entire process. But then technology introduces dematerialization which removed all the paperwork and brought stock market trading on digital platforms. All this is done with the help of a Demat account. Many of you will not be familiar with this term and will be having a question what is a Demat account?

  • Demat account:

Here, under this head, you will get to know about what is a Demat account and how it is useful. Let us tell you that the Demat account is nothing but just like your ordinary bank account. But it helps, unlike your bank account, you in holding your money. No matter what type of security you hold, it will be reflected in your Demat account. Earlier having a Demat account was not a necessity to trade in the stock market. But now if you don’t have a Demat account, you can trade in the share market. If you want to open a Demat account to trade or invest in the share market, you can visit the website of 5paisa and know the steps to open it.

As you have known what is a Demat account? Now you should gain some knowledge about what is dematerialisation. It is a process that assists you in converting your physical securities into digital ones. This process allows you to have access to your securities at any time and from anywhere. No matter what corner of the world you are in and what device you have, by accessing your Demat account, you can have access to your securities.

  • Why a Demat account is important?

Having a Demat account does not only help you in accessing your securities but it also helps in saving time as well as cost. As already stated above, earlier it used to take a long time like weeks to process share buy and sell transactions. But now it has become a matter of a few clicks. Within a few seconds, you can buy or sell stocks. Furthermore, it has also increased transparency. You will be shown all the costs that you will be charged. There will be no hidden costs. As there are no middlemen, brokerage costs will also be decreased.

You will be getting immediate updates of all movements in your Demat account. As soon as you sell or buy shares, apart from the notification from the app, you will also get an email that your shares have been sold or bought. The security levels have also been increased with the help of a Demat account.

You may also like

Leave a Comment