Know the benefits of Demat account

Know the benefits of Demat account

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A Demat account is an essential instrument in today's financial landscape since it provides investors with a simple and safe electronic securities management solution. The benefits of Demat account are evident in their ability to eliminate the risk of physical damage or loss associated with paper securities. This electronic substitute for tangible share certificates has completely transformed the trade and investment landscape in a number of ways. 

Trading and portfolio management are simplified with a Demat account. It gives investors a consolidated platform to manage and keep track of all of their assets, including mutual funds and stocks and bonds.

Benefits of Demat Account

The benefits of Demat account are manifold, starting with the secure digitization of financial assets, ensuring peace of mind for investors. As it is mandatory to open a Demat account you must also know what other perks you get from an online demat account.

  • No Physical Certificates

One of the primary benefits of Demat account is the elimination of physical paperwork. Having a Demat helps the investor to overcome the quintessential risks of physical delivery. You would recollect that in the erstwhile physical settlement format, the shares had to be held in paper form. For transfer of ownership, such shares had to be physically sent to the company’s registrar. And physical delivery creates a lot of problems with logistics. 

  • Accurate Trade

In the past when investors had to deal with physical certificates and physical settlements, most of the brokers would have a dedicated team working on bad deliveries. Bad deliveries happened for several reasons like signature mismatch, name order mismatch, name wrongly spelt in the share certificate, incomplete details in transfer form etc. Demat has solved the entire problem of bad delivery.

  • Easy Benefits

We are talking about dividends, bonus issues, rights, splits, etc. Which have become a lot simpler under usage of Demat accounts. The bonus shares and split shares are now automatically credited to your Demat account if your name appears on the record date. Even dividends are automatically credited to your bank account based on the record date. 

  • Flexible Order

A highlighted benefit of Demat accounts is that you can buy and sell shares only in specific lots. In the event of rights or bonuses, the problem of odd lots made the stocks illiquid, as they could not be disposed of in the market except through the odd lot market at a discount. With Demat, you can buy and sell even one single share, so the issue of odd lots is resolved. 

  • Cost-Effective 

Demat is a lot more cost-effective for the issuers of equity, the brokers and also for the investors. Since no physical shares are involved, Demat account is free of stamp duty and that brings down the cost of transacting substantially. The reduced paperwork is a major cost saving for the companies. For the brokers, the biggest advantage is that they now don’t need to maintain a full-fledged bad delivery rectification department.

  • Quick Trade & New Opportunities

A Demat account's real power lies in the fact that it integrates all your financial holdings and allows seamless transactions. Here is how it works. When Demat is combined with internet banking and online trading, the seamless chain makes the process simple, quick and efficient.  

  • Easy Monitoring And Access

A significant benefit of Demat accounts is their role in simplifying the process of applying for IPOs, making it accessible to a wider range of investors. From the comfort of your home, you may easily monitor and manage your trading account with fully online-operated Demat accounts. No matter where you are or what time it is, you may easily trade, monitor, or access your account. 

  • No TDS on Demat Securities

One of the issues taxpayers face is TDS, or Tax Deduction at Source. Nevertheless, when a Demat account user makes payments from his account, the CBDT—Central Board of Direct Taxes—has given a dispensation from TDS. Additionally, TDS deductions are not applied to interest payments on bonds and securities. Make sure your stocks are listed on NSE and BSE and saved in the Demat mode to qualify for TDS exemption.

  • Global Investment

The spread of Demat accounts greatly promotes globalisation. Through these accounts, foreign investors are offered simple access to the Indian stock market, which helps India's economy.

  • Requiring Zero Stamp Duty

Physical trading involves additional expenses like processing charges, stamp duties, etc. When you trade utilising Demat accounts, all of these extra expenditures are eliminated, saving you money. 

  • Corporate Gains

Demat accounts instantly update any bonus shares, stock splits, or right shares offered by businesses. This indicates that you will get your account's refunds, interests, or dividends immediately. The automatic nature of this function makes Internet trading convenient.

  • Loan Facility

You can access different bank loans using the securities stored in your Demat account, in addition to utilising it as a security deposit for your money. You might use the securities as collateral for a loan from your bank.

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Table of Content

  1. Benefits of Demat Account
  2. Features of Demat Account
  3. Why Open A Demat Account With BlinkX?

Features of Demat Account

Demat accounts provide investors with a secure and efficient way to manage their investments. Various features of demat account are explained in detail as follows:

1. Safe & Secure Transactions

A secure platform for buying, selling, and transferring securities is offered through Demat accounts. These accounts guarantee that financial transactions are protected from fraudulent activity and unauthorised access through strong authentication and encryption procedures. Since their investments are protected from any risks, investors can trade with confidence.

2. Digitisation of Securities

The ability to transform physical securities, such stocks, bonds, and mutual funds, into electronic form is one of the main characteristics of a Demat account. Physical certificates are no longer necessary because of this digitisation process, which guarantees that securities are preserved online. This streamlines the entire trade procedure and lowers the chance of loss, theft, or damage.

3. Easy Portfolio Management

Easy Portfolio Management: Keeping a diverse financial portfolio under control could prove difficult. Investors can streamline this procedure by combining all of their holdings into a single electronic account with demat accounts. Investors are able to keep tabs on market trends, evaluate investment performance, and make well-informed decisions . Investors may efficiently strategize and optimise their portfolios with the help of real-time data and comprehensive transaction histories.

4. Paperless Transactions

Demat accounts provide secure storage of electronic securities and safeguard investments from physical damage or loss. Opening a Demat account removes the paperwork associated with conventional trading techniques. Investors no longer worry about cumbersome documentation, signature verification, and document storage. Electronic execution is possible for all transactions, including securities purchase, sale, and transfer. By using less paper, this paperless method not only saves time and work but also promotes environmental sustainability.

Know the benefits of Demat account


Why Open A Demat Account With BlinkX?

Opening a Demat account starts you off on the journey into the world of equities and other investments. However, there are some special benefits of opening your Demat account with BlinkX. 

  • Zero opening charges by BlinkX
  • Free Annual Maintenance Charge for the first year.
  • Quick Demat account opening with online e-kyc
  • Frequent market updates
  • Low trading charges
  • Advanced trading tool & Easy UI
  • Customised dashboard

Lastly, you can be assured of the JM stamp of quality and customer responsiveness, which will also reflect in the Demat account opened with BlinkX.
Click here to know is demat account safe.

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The benefits of Demat accounts extend to their ability to streamline the entire investment process, making it efficient and user-friendly. As we know what are the benefits of a Demat account, and know its importance. You can simply open a Demat account and open the portal for investments. With online Demat accounts, there have been lots of changes in the functioning of the stock market. To know more about the stock market follow BlinkX. You can download the trading app and open your Demat account in just a few taps. Take control of your trade with BlinkX stock trading platform.

Benefits of Demat Account FAQs

Yes, a Demat account is one of the three components in a 3-in-1 account, which also includes a savings bank account and a trading account.

The minimum balance requirement for a Demat account varies based on the policies of different financial institutions and brokers.

For investing in the stock market, you need to open a Demat account as per the guidelines set by the SEBI (Securities Exchange Traded Board of India). You can open a free demat account with blinkX. Just go to blinkX website or download blinkX app for opening your demat account online.

There is no limit of how many financial securities you can hold in your demat account. You can add an unlimited amount of financial assets in your demat account.

Two major advantages of a demat account is ease of trade and quick trade settlement compared to traditional ways of trading which used to happen in the past.