What do mean by Demat account?


Investors used to hold physical certificates for their stocks before to the development of Demat accounts, which made the procedure laborious, time-consuming, and vulnerable to loss or damage. Demat accounts made it simpler to buy, sell, and transfer assets securely and effectively by converting the physical certificates into electronic form.

Similar to how a bank account maintains money digitally, when an investor purchases securities, the Demat account electronically records the ownership information. Similar to this, the corresponding holdings are deducted from the Demat account when an investor sells stocks. Depository Participants (DPs), which might be banks or financial institutions approved by the central depositories (such as NSDL - National Securities Depository Limited or CDSL - Central Depository Services Limited) in this country, provide this account.

Read also: Can We Open A Demat And A Trading Account At The Same Time?

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