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That’s where your stocks will go and be safe!
Demat Account is short for dematerialisation account
This account enables the process of holding investments like shares, bonds, government securities, Mutual Funds, Insurance and ETFs easier. The main advantage being it is digital and all your investments are in one place and under one account - just like you have bank account for your money.
Earlier each and every transaction was done physically and you had to maintain these investment certificates physically. Demat account has smoothened this process. Buying and selling is easy as well as you can do it online.
You could also earmark or place under lien securities in your demat account and seek personal loans or other types of loan. The lending bank will seek your approval to pledge the selected securities in your demat account. You will continue to be the shareholder and will continue to get all the benefits except that you cannot sell the shares.
Tax free capital gain bonds are issued instead of physical certificate if you have demat account.
Demat account surely makes our life easy. I truly wish someone, somewhere would bring real estate title deeds to be electronically linked as well instead of holding on to Title deed etc…