The concept of Demat account came into existence in the year 1996 in India. Before the introduction of this concept, the shares and securities were traded physically. With the help of this account, the whole procedure of investing has become highly convenient and faster. A lot of companies provide the option of best Demat account. The process of conversion of securities into an electronic form from physical is optional. Nowadays it is very much difficult to buy and sell the shares physically. This very well highlights the importance of electronic Demat based accounts.
Some of the features of this type of account are mentioned as follows:
- It facilitates easy transfer of shares: This can help in very easily transferring the shares and indulge themselves in buying and selling conveniently and cost-effectively. The whole process is undertaken with the help of slips that help to give the details which are required to execute the transactions in the smoothest possible ways.
- It has enabled faster dematerialization of securities: All the holders of accounts can give the instructions to the depository about the conversion of the certificates from physical to electronic format. Also, the vice versa process can also be taken in case it is required by any of the investors.
- It provides a facility of pledging so that loan can be availed: Many lenders provide loans against different kind of securities which are held in the Demat Account of the borrowing person. These holdings can be very easily used as collateral so that loan can be availed by the holders of the account.
- The option of freezing the accounts: The Demat account holders can also freeze their accounts in case it is required for some time. This option is always beneficial for all those people who want avoid the surprised debits and credits into their account. This option is there for a number of securities which are there in the accounts of account holders.
- It also provides multiple numbers of accessing options: Such accounts can be operated in an electronic manner which means that it can be used by multiple modes at any time. These accounts can also be accessed with the help of internet and a smartphone, computer or any other smart device.
- It has increased the speed of electronic facility: The NDSL is the Authority that allows the users to send the instructions slips electronically to the DP. This has made the whole process highly convenient and cost-friendly. It can save a lot of time and has also increased the speed of transfers.
- It can provide several corporate benefits: In case any of the company offers dividends and interest to their investors then all these kinds of benefits are naturally available to the Demat account holders. The corporate actions like bonus shares, splitting of the stock is also updated in all these kinds of accounts of the shareholders.
Hence, the Demat account holders enjoy several benefits and all the features associated with the Demat account have been mentioned. A lot of benefits and features, provided by Demat accounts turn to be the reasons for their popularity. This concept has revolutionized the process of investments in the stock market.