SIX ADVANTAGES OF HAVING A DEMAT ACCOUNT
The current pandemic situation is a testimonial of the need to become financially independent and create a portfolio of assets for your tomorrow. When unpredictability surrounds us, with multiple businesses in crisis, the need to secure our present and future is essential. One should save and invest at least 20% of their income in either mutual funds, stocks, debt funds, or any other asset classes. And the very first step on the road to financial literacy is having a Demat account.
Warren Buffet rightly said, “The best chance to deploy capital is when things are going down.” This means the right time to invest is now when the share market is at its lowest. And a Demat account can be really handy to manage your equity, bonds, and mutual funds investment transactions online. With a Demat account, you eliminate the need for holding physical share documents and these provide a platform for carrying out all your online transactions and manage your entire financial portfolio from anywhere anytime.
But understanding the basics, how will the Demat account help you? Why do you need to open one?
Easy to access – anywhere and anytime technology
Today has enabled us to access everything in very succinct ways. Whether it is an app on your phone or log in through your laptop, managing the shares, funds, etc. is easier than ever. A Demat account provides you with the flexibility of operating all your share market investments through a single login, obliterating the needs of managing investments physically.
Getting and providing loans
Your securities in the Demat account can be used as collateral for obtaining a loan in the future. Many lenders give loans to the borrowers based on possessions or holdings held in their Demat account. A good portfolio is a symbol of an intelligent investor, hence increasing your credibility score.
No restriction on the size of the portfolio
With a Demat account, one can buy and sell any number of shares. Previously with physical certificates, one had to restrict themselves to certain quantities or lot sizes. It eliminates the issue of trading with a single security.
Corporate action and regular updates
When investing in the share market, apart from just the increased share prices which benefit the investor, there are other monetary benefits of dividends, refunds, or interest received from the ownership of the shares. A Demat account enables access to such funds as it keeps you notified of the current market updates on bonus stocks, new stocks, top-selling stocks, and much more.
Saves money and time
Taking accounts online and on the cloud, the extra expenses of stamp duty, handling charges, and so on, in physical transactions are eradicated. A Demat account saves extra costs and paperwork. This saved time allows the account holder to make smart choices about his/her portfolio.
Security and Portfolio Protection
With online security and transparent transactions of shares, a Demat account is much safer than holding a physical share as there is no scope for miss-happenings like any theft or crime. You can access all your documents, shares, etc., and more with a click of a button.
A smart investor believes in allocating his/her money in multiple asset classes. Whether it is a SIP or mutual funds, regular investing is your way to secure your future but also helps your money grow with time. With inflation growing every year, buying assets over liabilities is your way forward and a Demat account can help you achieve that with ease.
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