Ever witnessed the share market of the 20th century or 19th century? Or saw some photos or those black and white documentaries? The market of that time didn’t at all seemed to be anything like the market of today. The shares were sold manually by employees. Shares were paper-based and had physical forms. All of the accounting and records of transactions were maintained on paper. All these systems came to a halt after the advent of computers at the end of the 20th century and the beginning of the 21st century. Computers replaced record books of all the transactions and calculators replaced the army of accountants. The process started becoming lighter and more efficient. And along with all these changes came the Demat account. Demat accounts eliminated the need for shares to be traded on paper. With its advent shares can be stored in electronic form in the Demat account itself. Demat abbreviation of dematerialized which means something that is already existing in the material form is transformed into another form. Like the transformation of physical financial securities or shares into electronic form. Demat accounts can be operated by the users themselves or a broker can handle it for them. For operating Demat accounts by ourselves we need to have an internet connection and the required set of documents. Several websites offer the services of opening a Demat account online for free.
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Perks of Demat account:
- Convenient: With a Demat account, trading can be done by traders from anywhere around the world without any issue. All these needs are a working internet connection and account credentials of the Demat account. This also helps in keeping track of all the past made transactions and maintain the financial records.
- Act as collateral: The financial securities present in the Demat account increases its value and credibility more than anyone can imagine. Such is its reputation that banks are willing to provide loans against the Demat account as collateral. The shares in the account are what the banks are really after and that’s the reason they provide the loan without any hassles.
- Transferring or reassigning: Shares can easily be transferred from one account to another. Transactions with Demat accounts are almost instantaneous. This eliminates the possibility of any potential loss caused due to a delay in the transfer of shares. Unlike the old school style of carrying big loads of paper for transferring shares because back then the shares were only published on papers.
- Building economy: Demat accounts provide special schemes and facilities to the people overseas who want to invest here in the Indian stock market. The influx of copious amounts of money inflates the stock and tosses the market for a bull run. This, in turn, improves the position of the market which is an indicator of the well-being and development of the country.
Conclusion:
A Demat account with its advent has introduced many folds of conveniences and advantages. Processes have become ultra-fast and efficient this allows the trades to take place at a faster rate than before. All that is required for a Demat account is user credentials and an internet connection. You can open a Demat account with 5paisa.
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