Demat accounts hold bonds, equities, mutual funds, etc. If you have a dream to trade in the stock markets, opening a Demat account is necessary then. As soon as you open your trading account, you can simultaneously open your Demat account. An NSDL or CDSL-affiliated depository participant is needed to open demat account online. Henceforth, whenever you sell or buy shares, the crediting and debiting of the shares happens in your Demat account. The complete process of a demat account takes place online. This makes your asset secure and safe undoubtedly.
Here are some of the reasons of opening a Demat account:
- Risk eradication
If you hold a share in the Demat account then it is a secured option to choose. It offers a lot of security for an individual to invest in a Demat account compared to other accounts. Financial assets in physical form are always risky to be held. A Demat account does not allow this to happen. In physical form, there exists the risk of theft of the share certificates. It troubles an investor immensely and he has to go through a lot of paperwork. Recovering lost assets becomes a stressful job undoubtedly. Also, whether there will be any recovery or not is never guaranteed. A Demat account offers negligible opportunities for the assets to get lost.
- Fewer errors
Every accounting system often comes up with unwanted errors. Demat account is an online settlement, which is an exception to this error matter. It incorporates no manual work to be considered. As a result, the chances of having errors become near to zero. Earlier the physical settlements related to financial aspects had multiple errors that investors encountered. This is the reason shifting to online formats became necessary with time. Demat account falls under the latter for which such erroneous trades have got reduced highly.
- Faster settlements
Settlements of trade usually take a lot of time to take place. That is why alternate options have become popular in that case. Often one to two weeks was usual for a trade to get settled. This is because physical activities were incorporated into the process which delayed the work. But, the demat account has helped in this regard immensely. The period needed to conduct a settlement is reduced completely. It now requires only two days for the entire process to get completed. As a result, a lot of time the investor gets saved indeed.
So, these were the reasons why you should open a Demat account. Besides that, there are many more reasons too that can show you that a Demat account and options trading as well is fruitful for traders. It consists of no bad deliveries making the whole process of trading smoother. Moreover, it transfers securities compulsorily without any stamp duty imposed on them. It also has considerable nomination facilities for interested people. The customers associated with the process will always be updated with the ongoing information available. Hence, no miscommunication exists in such a process of trading. Hence, if you open a Demat account you will get every convenient service in regular as well as emergency periods efficiently.
