Everything You Need to Know About Demat Account

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 A demat account is necessary for anyone who wants to step into the world of stock trading. One must understand the functioning, types, and uses of this account to use it to its fullest potential. It is an electronic account where an investor or trader can store all his share market holdings digitally. There is no scope for theft, forgery, duplication, or damage to the share certificates one holds in this account.

Converting the physical share certificates into their digital form is known as dematerialization. Share market enthusiasts can trade or invest in the share market from anywhere using the online demat account. It has made trading and investing quick, straightforward, and cost-efficient for the new-age investor.

There are majorly four types of demat accounts - Regular Demat Accounts, Basic Services Demat Accounts, Repatriable Demat Accounts, and Non-Repatriable Demat Accounts. This account equips an investor with a digital and secure platform to hold his share certificates. It provides for an instant transfer of securities, which was not possible with the earlier system of physical share certificates. Moreover, it eliminates the need to physically visit the stock exchanges to book a trade. The transaction cost reduces for traders as there is no stamp duty involved.

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