Investing is so dynamic that having a Demat account has become indispensable. It makes investing in equities, bonds and other financial instruments easy. In this article, we look at the top 5 reasons why you should open demat account as it is a game changer.
1. The Handling of Corporate Benefits
Dividends, bonus shares, and rights issues are automatically credited to your demat account. This means no more manual interventions, which are error-prone if done with physical certificates. When a company announces a stock split, it is shown directly in your demat account without your interference. This security will ensure you don’t miss out on benefits due to operational delays.
2. Managing Investments Smoothly
Demat account resolves the complexities associated with physical shareholding. Managing physical certificates used to be risky as they could get lost, stolen, or damaged. All your securities are now stored digitally, safe, and intact. Through a single demat account, you can handle many instruments such as stocks, bonds, and mutual funds.
3. The Cost and Transparency
One of the benefits of opening a demat account is the cost saved on physical trading: these physical certificates need stamp duty, courier charges, and rectifications. With demat trading, these overheads are negated, and you get a more economical solution. In addition, because brokerage fees are lower for them, brokers pass on the cost savings.
The digital format helps to create complete transparency in transactions; thus, there is full trust between investors and brokers.
4. Improvement in Trading Speed and Efficiency
Transactions happen at great speed on a demat account. Indian stock market settles on the settlement time of trades within two business days. This boosts its liquidity, enabling you to reinvest your capital faster. Faster trading capabilities also help reduce risks, making the trading experience more pleasant.
5. Usage of Indices like Finnifty
Demat accounts open the gates to investing in indices like Finnifty, which takes care of financial services companies. Finnifty exposes you to a wide range of the finance sector, including banks, insurance companies, and NBFCs. When you have a demat account, it is easier to invest in such indices.
6. Get Easy Access to IPOs and Other Investments
Demat account is the most revolutionary step in the field of IPOs. The whole process of applying for IPOs was tedious. Today, shares are credited directly to your account within days of allotment. This efficiency is also applicable in exchange-traded funds (ETFs). This digital accessibility gives investors great power to capture the market.
7. Conclusion
The first step in efficient and secure wealth management is to open a demat account. Trading becomes simple and convenient for you to access a variety of financial instruments. Begin your journey by studying brokers and how to open a demat account immediately.