“A good lawyer knows the law. But a great lawyer knows the Judge.”
Have you ever come across a situation where you need to prove yourself in front of your Boss? There must be many. Hence having a terrific impression over your Boss is not only essential but a must in the corporate world. So It is good to fill your brain with little trivia so you can use it as a tool to make an impression upon him. Today, Investment Unblocked will give you an overview of Demat account commonly used in stock market.
Basics of Demat account
Do you have basic knowledge of investing in stock market? Or you are naïve about it? And wondering if you can use your regular bank account for stock trading? Well, you are not alone with these questions. Most of the newbie don’t have the basic knowledge on what kind of account used for stock trading. To invest in stock market, we need a specialised account called Demat account. Lets shed some light upon it.
What is Demat account?
We use a Demat account to hold shares and securities in electronic format. Demat account is the short form of Dematerialised account. The purpose of the Demat account is to convert the physical shares of a company to electronic format, so that share trading becomes easy during online trading.
Need of a Demat account?
It is up to the investors to hold the shares in physical form or electronic form. Like we said earlier, Monitoring the electronics format is more accessible than holding physical certificates of shares. Also, the buy-sell of shares becomes much easier with online trading. So making the buy-sell of shares hassle-free, we need Demat account to hold the shares in electronic format.
Benefits of Demat account
Once, shares were issued and traded in physical form. Later, to make things easier for investors, shares were converted from physical form to electronic form to hold, buy, and sell immediately and monitor the share prices easily.
Below are some advantages of Demat account:
1. Having a physical form of share is likely to be thefts, damages, and losses over time. So e-form of shares is secure and being stolen or damaged is less likely.
2. Like physical currency, physical shares are difficult to handle and keep track of it. But e-form of shares in Demat account is easy to track and monitor it.
3. The electronics form of share reduces the time of doing transactions of trading, whereas physical form was taking up to a few days of doing transactions.
Classification of Demat account:
There are three types of Demat account. They are
1. Regular Demat account: Investors living in India use this Demat account for online trading.
2. Repatriable Demat account: NRIs use this account for online trading under which the investor can transfer the fund abroad. This account needs an NRE bank account linked with it.
3. Non-Repatriable Demat account: NRIs also use this Demat account, but the fund in this account can’t be transferred abroad. It must link an NRO account.
We hope this blog is useful to you. To know more on Demat account, please contact Investment Unblocked on +91 9776759907.