At present, it is mandatory to operate a demat account if you wish to purchase or sell shares in India through the medium of the stock exchange. The stock market regulator SEBI has made it mandatory for all the traders as well as investors to have the demat account and the shares can be parked in this account only. However, the moment one wants to sell them he needs to move the shares from Demat to trading account before trading in it. All the shares that are held by way of certificates you are in a position to purchase or sell them. If it is the case that you are new fish in the market or are a toddler, it is obligatory for you to open the demat account. On the other hand, there are too many formalities of documents and signatures to be undertaken if they are in the physical form present with you. It is easy and safe to operate the demat account. It can be said to be one-time procedure above all to make out guidelines in favor of customers set therein. Here are listed a few benefits of the demat account.
No likelihood of burglary and stealing in the demat account
It rules out all possibilities of thieving your certificates and after that counterfeited for the reason that the certificates are held electronically in the demat account in place of physical form. This system does away with all factors of the risk that existed there formerly because previously the shares were found in physical form with their owners. Beforehand it offers you an opportunity to go for the best demat account in India and put an end to all hassle and risks.
Transfer of your shares can be completed instantaneously
Formerly, it was a set process to dispatch the shares to the office of the registrar or send to the company because the shares were to be transferred to the name of the owner of the shares. The procedure involved a long time as months were spent in the process and sometimes it happened that the certificate would get misplaced. By operating the demat account now such things are not possible, and the shares are at once transferred.
There is no stamp duty in making the transfer of securities
Now it is the rule to pay security transaction tax which does away with the procedure of buying physically share stamps for transfer and glue them on the certificate near the bottom as was practice before. The process that was followed before the beginning of the demat account was onerous, and the shareholders had to go to the stock exchange for purchasing share transfer stamps.
Now the possibility of selling one share
Earlier the individual shareholders were not able to sell shares via odd lots. It was not possible to sell 33 shares and also sizes that were found in odd numbers and could not be included in the saleable lots like 50, 100, and 200 so on. Now you can sell one share as old practice exists no more.