Demat Account: Benefits, Aims And Objectives

Over the years, the Indian stock markets have risen tremendously. Users are few at first, but over time, the number of traders and investors has expanded to millions.

One of the most necessary things to perform and transition or invest in is the Demat account. These accounts are different from ordinary bank accounts and can be used only for trading in stock markets. 

Your bank account and the stock market are linked through a Demat account. You can transfer money directly from your bank to the stock market.

Aims & Objectives of Demat account

It is necessary to have a valid Demat account for investing in the capital market. Because of several reasons, some of the aims and objectives of the Demat account are mentioned below: 

  • The main goal and objective of the Demat account is to maintain the traders’ or investors’ security. All records and share markets were reliant on physical transitions before the Demat account was introduced, which was dangerous. The market goes online and cashless after the introduction of the Demat account.
  • Cost-effectiveness: A Demat account allows you to invest or trade in capital markets for less money. To transfer funds to the capital market without paying brokerage fees, one must link their bank account to their Demat account.
  • Traders can now invest in capital markets from the comfort of their own homes thanks to the introduction of Demat accounts. Investing in digital form is simple. He is not required to bring cash to the stock exchange. Demat accounts reduce the need for human effort and provide the greatest ease.
  • Flexibility: An investor’s greatest loss may be his or her awareness of an opportunity. However, Demat accounts give traders the ability to keep up with all relevant news and information about stocks, shares, and commodities.

Also Read: India’s Top 5 Stock Market Trading Apps

Benefits of Demat account

  • Your Demat account can help you gain access to a variety of financing options from your banks.
  • Demat accounts provide investors with the highest level of security.
  • Demat accounts make it easier to obtain loans from any Indian bank. It will improve your credit score and enable you to take out large capital loans with cheap interest rates.
  • Demat accounts are accessible from anywhere on the planet. It can be accessed from a variety of devices.
  • The limitations will be removed if you use a Demat account. Within seconds, anyone can access and invest in any stock or share. Furthermore, this makes it easier to take immediate decisions and capitalize on opportunities.

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Frequently Asked Questions

Who can open a Demat account?

To open a demat account, you must be an Indian citizen with a minimum age of 18 years old.

How to open a Demat account?

Numerous brokers’ services and applications allow you to open free Demat accounts. Furthermore, online brokerage services such as Zerodha, Groww app, and Upstox allow you to register a demat account from the convenience of your own home.

What documents do we need to open a demat account?

Besides, some essential documents are required to start a demat account:

– Proof Of Income (Eg: Copy of ITR Acknowledgement)
– PAN card
– Proof Of Address  (Eg: Passport)
– Proof Of Identity (Eg: Driving license)
– Passport size photographs.
– Proof of Bank Account (Eg: Bank Statement or Cheque Book)

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