'Demat Account' is a very common term amongst people associated with banking, economics, and finances. A Demat account is almost similar to a bank account but has a thin line of difference within them, i.e. Unlike bank accounts, Demat accounts don't hold your money; instead, they store your securities in the form of bonds, debentures and shares.

There might be times when you want to buy shares and securities in the stock market. But before purchasing securities and shares from the stock market, you need to have a Demat account for yourself. Opening a Demat account for yourself is very simple, and you can open a Demat account online. Read the full blog to know everything regarding a Demat account.

Why Do You Need to Have a Demat Account?

There might be times when you have made up your mind to purchase or sell securities from or to the stock markets. To do that, as an investor, you must have a Demat account along with a Depository Participant.

Why Do You Need a Depository Participant?

Depository participants are nothing but agents through whom you can get the ability to avail the services of the depository. As an investor, you need to go through a depository participant who will mediate between you and the depositories.

Advantages of Having a Demat Account

Having a Demat account becomes very beneficial when you want to purchase or sell shares and securities from the stock market. Some of the very significant advantages are:

• The procedure is very convenient and easily settles all electronic transactions.
• Your securities and shares are held in safe hands.
• Less paperwork is involved in the entire procedure.
• You can purchase and sell even the minimum number of shares.
• Your transaction cost is cut down since charges for stamp duty are not required.
• Since there are zero physical certificates, you don't have to worry about your certificates being stolen or getting lost.
• The facility of investing online is always an active option.

How to Open a Demat Account?

Opening a Demat account is a simple procedure since you can submit all the required documents online. Firstly you need to choose a depository participant for yourself, and then you need to log in to your DP's website. Then by clicking on the 'Open Demat Account' tab, you need to fill in all your details as per requirement. After submitting all your documents, your DP will conduct in-person verification. In a week or two's time, your DP will provide you with your Demat account ID or a number, and then you can easily access your Demat account online.

To Conclude

After opening a Demat account, you can free yourself from all worries regarding your assets. Since there is zero involvement of paperwork and certificates, you have a holding statement for the Demat account. This holding statement will give you a detailed assortment of all the shares you hold and their whereabouts.

Final Thoughts

Demat accounts are extremely safe and secure, and you can rest assured that all your assets are in safe hands.

As Demat accounts hold your shares and securities and not your cash, you can't proceed with any cash transaction through your Demat account. For withdrawing cash, you are required to log in to the trading account that you have previously linked with your Demat account.