What are the Benefits of a Demat Account, and Why is it Needed?
What are the Benefits of a Demat Account, and Why is it Needed?
In Simple works Demat account is a digital locker of shares or a place like Gmail where you hold your electronic formate of Equity Shares in the same.
NSDL and CDSL or the two bodies provide shares and the same via allocated from brokers to your Demat account, as a citizen of India you do not have the freedom to open a Demat account yourself, it has to be done via financial bodies of India, like banks and brokerage firms doing it on behalf you with by collecting the necessary information and documentation required.
When you buy any shares from the general shares pool at any particular LTP, the electronic formate of shares will be allocated to you, the same need to be saved under your name at some place, hence the concept of the Demat account.
Generally when you buy any shares the day of trading is considered Trade day (T), so from this point it takes 2 business days to get the shares in your name into your Demat account, so it is denoted as T1 and T2. So, the holding of shares in your account after T2 is called delivery shares.
in case, you have sold the shares you purchased before T2 days then the chances of penalty is more as you will not have any shares in your Demat account and also the shares you see in the account which are not yet in your delivery.
Hope this information is useful and upvote my answer. The best Demat and trading account provider in India is now ZERODHA. More details on them are here.
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