What is Demat Account What is the Use of it in Simple Words

Presenting What is Demat Account in detail and also What is the use for a trader or investor with Demat and the best service brokers offering demat account…

Investing in India has become a new trend and has been growing constantly from 2016 to this year. In 2016, there were around 20 million demat accounts which will grow to 11 Crore accounts till January 2023. So you should also be wondering if investing using a demat account is the best and mandatory option for Investment in Share market.

If that is the case, then you should learn more about Demat account meaning, uses, features and best services to get a demat account from as well. We will be helping you with all the information on demat accounts to help you become aware and make better financial decisions through this article as a form of educational purpose only.

Before you start using a Demat account you should learn its meaning, what uses does it uses and the features that every Demat account comes with as well that we have mentioned below.

Demat Account Meaning

A demat account whose full meaning is dematerialized account can be simply considered as an electronic account that allows you to store, hold, transfer and buy shares and securities. Every demat account has to be linked to a bank account but it is different from a regular bank account which does not directly deal with shares and securities.

If you want to open a demat account, you should contact a Depository Participant (DP), which is linked to a corresponding bank account for buying and selling shares. Having a demat account allows for easy and efficient share management, as well as improved investor safety and security.

What is Demat Account What is the Use of it

  • Buying and selling shares: A demat account is primarily used to hold shares and securities electronically, allowing you to buy and sell shares online.
  • Efficient management of shares: Because all transactions and holdings are recorded electronically, a demat account allows for simple and efficient management of shares.
  • Dividend and Interest credit: Dividend and Interest on shares and bonds held in demat account are credited directly to the demat account.
  • Safe and Secure: Demat accounts also increase investor security. It eliminates the possibility of forgery, fraud, and fake shares.
  • Easy transfer of shares: Transferring shares between accounts is simplified with a demat account.
  • Avail loans: You can apply for loans with the shares held in your demat account.
  • Tax benefits: When holding shares in demat form, certain tax benefits are available.

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Best Services to Get a Demat Account Online

Below are some of the best service brokers that you can use to register a Demat account online.

  • Zerodha
  • Upstox
  • ICICI Direct
  • HDFC Securities
  • Kotak Securities
  • Axis Direct
  • Sharekhan

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What is Demat Account Used for?

A demat account is used to store shares electronically and through it you can transfer and buy shares using your demat account.

What is Demat Account in Simple Words?

A Demat account which is used to hold shares electronically rather than physically, because it is secure and simple to manage.

Is Demat Account a Bank Account?

A Demat account is not a bank account, but it is linked to one in order to purchase and sell shares like a bank account.

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