Demat Accounts: How does dematerialisation benefit investors? MintGenie explains
The transition from physical share trading on exchange floors, conducted via open outcry systems, to the seamless execution of transactions through mobile trading platforms represents a notable transformation in the stock market.
This regularly updated new feature promises time-saving convenience for users. While we currently conduct digital trading of stocks and other major asset classes, the groundwork for this advancement was laid back in 1996. The process of converting physical shares into the electronic form is called dematerialisation.
In this article, let's delve into what a demat account is and how dematerialisation benefits investors and the advantages it offers over traditional paper-based transactions.
A dematerialised (demat) account serves as a digital repository for the financial securities purchased by an investor, holding them in electronic form. This account streamlines the storage and administration of financial securities, offering ease of use and accessibility to investors.
The eligibility criteria for opening a demat account in India are quite flexible. For example, there is no minimum age requirement for investors interested in trading and opening a demat account. Minors can also have a demat account established on their behalf by their parents or legal guardians.
Possessing a demat account is crucial for individuals intending to participate in the Indian stock market.
With the liberalisation of the Indian economy during the 1990s, the Indian capital market underwent a remarkable expansion in business volumes. A substantial increase was witnessed in the capital raised through new issue markets, accompanied by a surge in the number of new issues. Trading volumes on stock exchanges grew
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