You go through a whole month, toiling hard for your salary to be credited in your account. This fixed monthly cash inflow is solely responsible for meeting your daily expenses and saving for various life goals. Though, the day to day expenses makes it impossible for you to stop and think about saving for your future goals. This is where investment comes into play!
Imagine a snowball rolling down a snowy slope. At first, the size of the snow is negligible; however, as it rolls down the hill, it collects more snow and becomes massive. This is precisely how an investment works. In today’s world, there are traditional investment schemes like PPF, along with modern-day investment strategies like Mutual Funds, and a stake in shares. Earlier there was much paperwork involved with the investment. However, with the passing time investment has become a streamlined process with the introduction of ‘Demat Account.’
What is a Demat account?
Gone are the days when investment entailed a lengthy process. A demat account in India holds a variety of investments like equity shares, mutual funds, bonds and government securities in a dematerialized format, i.e., electronic format. Your bank account holds your money and records the credited & debited balances. Similarly, a Demat account holds your investments in an electronic form. Whenever you invest in funds or shares, it will be credited or debited to/from your Demat account. Let’s look at the countless other benefits extended by a Demat account:
- Save Time with a Demat Account
There was a time when you needed paper made certificated for any investment. However, now you need to open a Demat account to maintain all records of your investments in dematerialized format. Under dematerialization, your investment certificates are recorded in the electronic form to increase the accessibility. A demat account makes the entire process faster and paperless, which is a huge time saver for an individual investor.
- Monitor Your Account Anytime, From Anywhere
You can monitor your investment with a Demat account anytime, and it can be accessed from anywhere. You can conduct investing, monitoring, trading using facilities of the internet on your laptop, smartphone, or other handheld devices. Therefore, you can monitor your investments at the convenience of your home and increase the potential for profits with your interest and participation.
- Easily Transfer Your Shares
Previously, to transfer your shares, you would have to go through a long process of paperwork, and that would take up your precious time. However, with a Demat account, the transfer and settlements of shares were made easy.
The transfer of your shares can be done with the help of a Delivery Instruction Slip (DIS) where you’ll need to provide all the relevant pieces of information for a smooth transaction.
- Have Efficient and Risk-Free Investments
A Demat account decreases the risk of inefficiencies, such as delayed settlements and deliveries, thus allowing efficient and less cumbersome transactions while investing. You have an option to freeze your Demat account for a specific duration as per your requirements. It is done to avoid unpredicted debit or credit in your Demat account. Overall, an efficient investment strategy includes assessing your risk tolerance and diversifying your investments into multiple fund option. To get better returns, you can also use online SIP calculators to estimate the minimum SIP amount you can invest in an SIP.
Demat accounts are of crucial importance today because the entire financial platform of investing has become digitized. Hence, to allow you with a smooth and straightforward experience, demat accounts are the necessity of the day. You can apply for the best Demat account in India with reputed financial institutions like Axis Bank to maintain your investments systematically as well as concedes a smooth movement to invest in any scheme that you desire.