What is a Demat Account? A dematerialised (demat for short) account allows you to hold your financial instruments in an electronic form. It provides an easy and convenient way to hold financial securities in electronic form which is safer than physical shares which are exposed to various risks such as bad delivery, delays, thefts, forgery etc. You can hold certificates of all your financial instruments such as mutual funds , Exchange Traded Funds (ETFs), shares and bonds online. To invest in the stock market, as an investor, you need a demat account. With the Demat account, there is a significant reduction in cost due to lower printing and distribution and registration of shares which improved the efficiency of registrars and transfer agents. The Demat account has increased the liquidity of shares and ensures faster communication to investors with faster payment in the selling of shares.
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