Sample answer:
A demat account is similar to a saving bank account with a difference that instead of money shares are held electronically in this account.
The advantages of a demat account are:
- Eliminates the risk of forgery, counterfeiting and loss due to events like theft, fire, mutilation etc.;
- Reduces brokerage charges;
- Ensures quick ownership of securities;
- Reduces the time spent in stock trading to a great extent as problems like signature mismatch, postal delays are not encountered;
- Eliminates the need to undertake tedious paperwork;
Holders of demat accounts do not need to pay stamp duty.
A demat account is similar to a saving bank account with a difference that instead of money shares are held electronically in this account.
The advantages of a demat account are:
- Eliminates the risk of forgery, counterfeiting and loss due to events like theft, fire, mutilation etc.;
- Reduces brokerage charges;
- Ensures quick ownership of securities;
- Reduces the time spent in stock trading to a great extent as problems like signature mismatch, postal delays are not encountered;
- Eliminates the need to undertake tedious paperwork;
Holders of demat accounts do not need to pay stamp duty.
