The technology and the internet have brought about a lot of changes in our daily lives, where the stock market has not been left untouched. From an open outcry floor trading exchange to electronic exchange, the changes in the stock market trading are really notable. Earlier, while the certificates of shares and stocks used to be exchanged physically, now they are transferred through the internet. Many stock broking companies are also offering online trading facility. Thanks to the constant growth in science and technology. In 1996, when dematerialization was introduced, a process of the conversion of physical certificates into an equivalent number of securities in an electronic format and credited to the investors' demat accounts began. And thus, the history was created.

What is dematerialization?

To round up the above-mentioned facts, dematerialization is a process by which your physical certificates are converted into an electronic format. The investors can dematerialize only those share certificates which are already registered in their names and belong to the list of securities admitted for dematerialization at the depositories.

What is demat account?

A demat account to your share is like a bank account to your money. To simply put, a demat account is an account wherein you hold all your investment certificates such as shares, bonds, government securities, mutual funds and exchange traded funds in an electronic format.

Benefits of dematerialization

online trading facility

Common Bank:

Dematerialization is not only meant for holding stocks but also for holding debt instruments like bonds. So, it is a treasure to keep your all sorts of investments.


Since it is a common account, you don’t need to provide your account details every time you transact. These details will automatically get updated to the companies you transact with.

Single Share Transaction:

With the introduction of dematerialization, now a single or odd number of securities can also be transacted which was really a problem before the emergence of technology and online trading account.

No More Delivery Risk:

Dematerialization has also eliminated the risk and time of share delivery and thereby, has reduced the paperwork involved. Now, once your trade is approved, your certificate gets automatically transferred to your demat account within almost no time.

No More Extra Cost:

No extra cost is now involved in transferring securities as it does not need any stamp duty.

Easy to Preserve:

Paper certificates are prone to wear and tear but in contrast, demat is a safe and convenient way to hold your securities for ages to come.


Benefits of Trading Account

The Online trading facility has arrived as a boon to us as it has brought along end numbers of benefits with it. Some of the key benefits of trading account are mentioned below:

Single Accessibility: Having a trading account on the best trading platform in India enables you to have an access to all the stock exchanges across the country through a single platform. Some of the stock exchanges include the Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and Multi Commodity Exchange (MCX).

Convenient to Access: Online trading account holders can access their accounts any time and from anywhere. Some of the best demat and trading account platforms in India also have web and mobile based applications that further enable the account holders to access their accounts on mobile, desktop and tablets.

Easy Transaction: With the advanced application of technology, some of the best demat and trading accounts in India ensure that the investors can have seamless transaction without any hiccups. Right from the trading to fund and equity transfer, you can experience a very smooth process by using a secure platform.

Reliable Research: Another great advantage of having an online trading account is that you can have an access to daily research reports. This means you can take a look at the fundamental and technical research for being able to buy stocks wisely.

Growth of Demat & Trading Account in India

2016 has been the best year so far in terms of the growth of demat account holder. While Depository provider CDSL recorded 13.2% jump in demat accounts, NSDL recorded a 6.6% growth. The total numbers of investor accounts were 153.3 lakh at NSDL and 119.2 at CDSL at the end of January 2017, which later on increased 0.06% and 1.0% respectively by the previous month.

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A Few Important Things to Keep in Mind

Easy transaction: Remember that investing is your savings. So, be ultra careful when opening a demat account and trade. Make sure that you have a full control over the transaction and demat account.

Open a bank account: Open a bank account solely for trading purpose. Connecting your existing bank account or salary account with demat makes it difficult to track the share transactions exclusively.

Stay calm: Demat account keeps offering you information related to stock market. Do not get hyper should you see the rapid ups and downs of the market. Also, do not get tempted by the short-term price rise. Study the companies’ details and take a calculative decision before investment.

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