First, you need to open a Demat account and a Trading account to participate in the Stock market. A Demat account is similar to a Bank account, as it stores Securities instead of money. It keeps Securities in dematerialized form. It can hold multiple Securities and is essential to trade and invest in the Indian Stock Market. At the same time, a Trading account will help you buy and sell in the Stock market.
Demat accounts make storage, trading, & investment very convenient for traders and investors. They help carry out trades & investments easily and manage their portfolio efficiently.
After you open a Demat account, here’s how it can help Stock market investors and Share traders even more.
- Storage of Various Securities
Demat account stores Securities like-
- Equity, Government Bonds
- Debentures
- Sovereign Gold Bond
- Exchange-Traded Funds
- Preference Shares
- Treasury bills
- Commercial Papers
- Certificates of Deposits
- Capitals Gains & Tax-Free Bonds
- Mutual Funds
- Low Risk
Storage in Demat accounts is very safe. It ensures your Securities are not tampered with. It is difficult to store fake shares in it. Your Shares and other Securities are directly credited to and debited from your Demat account.
- Investing is Cheap
Previously, various charges were associated with investing and trading. Such charges were Stamp Duty charges, Handling charges, Postage and Transportation costs, Paperwork Charges, etc. With the arrival of Dematerialization, most charges have come down while some charges are eliminated.
- Reduced Delay
The settlement period has drastically reduced, ensuring you receive your shares quickly once you purchase them. If you choose to sell your shares, you will receive the money for them within two working days. The respective process of Dematerialization and Rematerialisation is also done quickly with the help of Depository Participants.
- Loan Against Demat
Your Demat account can be pretty valuable with all your assets in it. You can get a loan of up to 80-90% on your Securities as Collateral. Various Banks and Non-Banking Financial Companies (NBFCs) in India provide such loans.
Investors who have been investing for a long time can avail this opportunity when they need money in an emergency without losing out on their investments. It helps you receive cash without liquidating all your assets in your Demat account, ensuring that you gain complete ownership of it after you repay the loan and are still in possession of your Securities.
You can open a Demat account with any Depository Participant (DP). A DP can be a Bank, Asset Management Company, or Stock Broker.
IIFL Securities is a full-service stockbroker in India who can help you open a Demat account. They allow you to invest in IPOs, Mutual Funds, ETFs, Futures and Options (F&Os), Currency, Commodity, etc.
They provide comprehensive features that will help investors and traders carry out better trades and investments. They have an IIFL Markets app that provides the latest news, detailed reports, charts, etc., ensuring that you know every parameter before investing and trading. This app will allow you to open a Demat account for free.
