The Full Form of DEMAT Account is Dematerialized Account.
In this article, we will explain the detailed meaning of the Demat account along with the full form of Demat account in banking. DEMAT is stock related banking phrase widely used in the stock market. While trading the stocks online, the Demat account is used to hold shares and securities in an electronic format that is known as dematerialized stocks. Under dematerialization, your stock certificates provided by the company are converted from physical form to electronic form. You need a Demat Account number to exchange your stocks in the market electronically.
The opening of demat account is free of cost. However, there is some charges applied as an annual maintenance.
Full Form of Demat: Dematerialization
Demat Account or provides the facility of holding stocks and securities in electronic format. Shares are stored in a Demat account, thus facilitating the easy exchange of stocks in the market during online trading. A Demat Account holds all the investments of an individual like stocks, government securities, bonds, exchange-traded funds, and mutual funds in one secured place.
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Advantages of DEMAT Account for Stocks
In the Depository System of securities and stocks, the ownership and transfer of stocks take place by means of electronic book entries. Demat account owners can purchase and hold shares and securities. Users can utilize the account just like a bank account with the following advantages and safety features :
- No Stamp duty on transfer of securities.
- Immediate and fast transfer of securities.
- Elimination of ‘Bad Deliveries’.
- Elimination of risk by loss, theft, mutilation etc.
- Faster settlement and disbursement of Corporate benefits like Bonus, Rights, Dividends etc.
- Elimination of mismatch in Bank Accounts and Address.
- Convenient Nomination facilities.
- Convenient Transmission formalities in case of death of a holder.
- No TDS deduction for demat securities.
- Demat account information and statement regularly sent to the customer.
So, the full form of Demat is Dematerialization and the meaning is the conversion of physical share certificates to electronic records. Actual stock certificates are then forfeited by the company and retired from circulation in exchange for electronic recording.
I hope this article will help you to understand the full form of Demat, uses and advantages as well. Thank you.