Be it shooting a beautiful video, or playing cricket, one thing that matters is the right gear and its understanding. Investing money is nothing less and understanding everything about the financial investment you choose, is mandatory. There is one such investment instrument that most people nowadays are investing in and that is stocks and securities. Demat account is the key to understanding share market investment. If you are opening a demat account online, you might want to know more a little more about them.

Demat Account Facts You Should Know

We all come across technicalities we often miss, especially our financial investments. Someday, you wake up and realize that you should have known a few things before you actually invested. So let us help you with a few little-known demat account facts that will help you utilize the demat accounts in the right way at the right time.

Save the Stamp Duty

Shares and securities in a company are transferrable from a shareholder to someone who wishes to be a shareholder. This is done voluntarily and when you do this, you don’t need to pay stamp duty. If your brokerage firm demands a stamp duty to do so, make sure you talk to them.

Shares as an asset

Did you know that you can use your demat account as a collateral against your personal or business loan? If not, this might be brand new information for you. So, you can actually pledge your demat account securities to get a loan. This type of loan is also known as loan against shares.

Multiple trading accounts

In case you are planning to use your demat account with your full-time broker as well as the discounted broker, you can do that. You can link your demat account to different trading accounts at a time. If your broker does not allow you to do this, you can look at for a different broker service who does that.

Demat becomes dormant

Alright, news for people who have demat accounts but have not used it for a long time. Your demat account is account will be frozen if not used for 6 months. Even if your account is frozen, you will have to pay AMC charges. Therefore, close your demat accounts that are not in use.

Your securities are secure

Your securities are always secure, even if your broker closes down due to losses or any other reason. Your securities are not controlled by your broker but by the depositories. There are two depositories in India, the NSDL and CDSL. So, even if your broker closes down, your securities will be safe with these depositories.

We are sure you did not know many of the demat account facts we just mentioned. So before you open your demat account online, make sure you know these facts about demat account. These facts will help you utilize your demat account to full potential.