A Demat account has become a necessity for all categories of investors due to numerous
Eliminates risk associated with physical certificates: In demat system, the ownership of securities are held in electronic form. Hence, the risk associated with physical certificates such as loss during carrying of certificates from one place to another, worn out, theft, cost incurred while making the duplication of certificates, etc. are eliminated.
Immediate transfer of securities: When an investor buys securities from the market, the
securities are immediately credited into his/her account along with the ownership. The securities
do not have to be sent to RTA for transfers of ownership in demat system. Moreover, the
investors do not have to wait for a long time period to get registered in the book of RTA as the
legal owner of the securities.
Immediate settlement cycle: The transactions of securities are settled within T+3 settlement
cycle in electronic form. At the last day of the settlement cycle, the securities are credited into the
demat account of the buyer resulting the immediate settlement cycle.
Immediate distribution of shares allotted in IPO: The shares allotted in IPO can be easily and
immediately credited in the demat account of investor held with CDSC. Hence, the investor does not have to wait to receive the share certificate from the issuers. This aids to list the securities
immediately in the stock market.
Easy in portfolio management: Investors receive the statement of their account periodically
which helps them in managing portfolio and receiving the detail information about their
Solve the problem of address change: Investors do not have to inform their individual issuers
about the change of address through correspondence separately. Investors can register the
change through their DP only. DP updates and informs the change to all issuers of the securities
held by an investor through the depository system.
Easy in pledge of securities: In case, the dematerialized securities are pledged, such account can be locked in. While pledging the securities, the securities do not need to get transferred from the pledgor’s account to pledgee’s account.