Demat account is mandatory for those who want to invest in the stock market. This article is a comprehensive guide to understand the basics, types, benefits of the Demat facility and how does it work.
What is Demat account?
A Demat account (short from dematerialised account) allows you to hold shares and securities in an electronic format. It helps you to hold certificates of mutual funds, bonds, stocks, ETFs, etc. It operates just like a bank account in which the account will get debit when you sell shares and it will get credit when you buy shares.
You really need a demat facility because:
- The trading of shares and securities is not possible without having this account.
- You cannot invest in shares without having this account.
- As mandated by SEBI, you cannot store physical certificates of stocks. It can be stored only in electronic format.
Thus, this is the importance of having a demat account.
What are the benefits of opening a Demat Account?
- Decrease in costs
- It decreases the cost of holding the physical share certificates. It also decreases the cost of stamp duty, handling charges, cost of paperwork, etc.
- User friendly
- The Upstox demat facility is very easy to use. You can use the mobile application to buy and sell shares easily at your fingertip.
- Lower risk of theft
- The risk of theft and robbery is next to zero if you use the Upstox demat facility. The shares are stored in the electronic format which minimizes the risk.
- Speedy transfer of shares
- The shares can be bought and sold easily without the following the process of the paperwork. The processing time is very low as the transfer doesn’t take place through the physical share certificates.
- Easy to access
- It is easy accessible from all types of electronic devices such as mobile, desktop, laptops, etc.
- Easy to track investments
Upstox allows you to track your investments and their value easily so that you can take an informed decision.
Types of Demat account
- There are three types of demat account:
- Regular Account: A regular account for investors in India
- Repatriable Account: It is designed for NRIs with a requirement of NRE bank account.
- Non-Repatriable Account: It is designed for NRIs with a requirement of NRO bank account.
- So, you need to choose a variant of demat facility which suits your needs.
What is difference between trading and demat account?
The demat account acts as a storage space when you can store your shares and securities. It acts as a bank account where your shares and securities are deposited. It is a reserve for your holdings. The purpose of this account is medium-term and long term investments.
While the trading account helps you to buy and sell the securities within the same trading session or on the same day. It helps you to do intraday trading. It facilitates an effective flow of transactions in every trading session.
Why you should open a Demat account?
You should open this account with Upstox to make your investing journey profitable and hassle-free. Here are the top 5 reasons to open a demat account facility with Upstox:
- Take a break from paper form and open your account in just three steps.
- Invest through multiple access points and user-friendly web-based application.
- Enjoy seamless trading and get in-depth analysis from experts.
- Affordable account opening charges and brokerage plans for every customer segment.
- Speedy transaction processing and quick customer assistance.
You can also read about how you can apply for IPO by using the demat facility in our blog section.
Finally, we hope you like our article on What is Demat Account-Charges & Benefits of Upstox Demat Account very helpful. Please subscribe to our newsletter and never miss the opportunity to get the article directly to your inbox.
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