Benefits of Online Trading Through Demat and Trading Account

These days, it has become incredibly easy for anyone to invest in stock markets, thanks to emergence of online trading. Most of the trading takes place through electronic trading network nowadays because of the kind of efficiency, transparency in functioning and ease of use and access it affords. Earlier, if you were a trader or investor, you would have to constantly deal with loads of paperwork and bear with a time consuming transaction processing system. On top of it all, if you bought some shares of a company, you would have to ensure safekeeping of the documents which is no longer required in online trading.

This is made possible through the process of dematerialization of securities, which lets you keep them safe with a depository without the need for handling physical documents. This paperless method of buying, holding and selling securities is easy enough and you simply need to open a demat account with a depository participant which can be a broker, bank or other financial institution registered with a standard depository, which is duly recognized by Securities and Exchange Board of India (SEBI).

If you have a bank account, you can open a 3-in-1 account which includes your demat account, trading account and savings bank account. It is also possible to open a demat account with a broker along with a trading account for purposes of online trading. It is important to note that if you do not wish to trade but simply to keep any kind of securities including stocks, bonds, fixed deposits and mutual funds in electronic form, you can open only a demat account.

However, it would not be possible to engage in online trading through only a demat account and you would need a trading account as well for the purpose. In any case, demat account can be a useful tool for anyone who does not wish to handle physical securities and bother with their safekeeping. It can also serve as a centralized place for managing your securities in an efficient manner and making any changes in address or other important details without taking a great deal of time. With the addition of a trading account, it also becomes possible to buy and sell securities with great ease and realize the advantages of online trading.