Demat Account: Benefits of handling mutual fund investments through demat
In recent years, there has been a steady increase in inflows into equity mutual funds, reflecting the growing participation of investors in the flourishing Indian stock market. As a result, mutual fund assets surged by ₹14 lakh crore, or 35% year-on-year, to a record ₹53.40 lakh crore in FY24.
According to the Association of Mutual Funds in India (AMFI) annual report, this percentage gain marked the highest growth since fiscal 2021, when the industry expanded by 41%.
Moreover, the number of folios reached a record high of 17.78 crore, contributing to an investor base of approximately 4.46 crore. The surge in retail investors' participation in Indian stocks underscores a burgeoning interest and confidence in the equity markets.
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With a stronger retail investor base, the market is poised to withstand FPI (foreign portfolio investor) outflows, offering stability and resilience in volatile market conditions.
The strong inflows into the mutual funds were attributed to the adoption of systematic investment plans (SIPs). In fiscal 2024, net inflows through SIPs amounted to ₹2 lakh crore, indicating growing investor confidence and a disciplined approach to investing.
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The SIP route has become increasingly accessible to investors, with brokerage firms now offering direct SIP investments through demat accounts.
In this article, we will explore some key advantages of utilising a demat account for mutual fund investments.
A demat account serves as a digital repository for an investor's financial securities, holding them in electronic form for ease of storage
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