What is Demat Account
over the past few years, systematic investment plans (sips) have become the most favourite investment option among investors. with the introduction of demat accounts, investments have become easier, safer and quicker and holding mutual funds through a demat account is even more convenient. this short-read aims to explain to you the meaning of a demat account and the benefits of holding mutual fund investments through a demat account.
demat is a short form of the word dematerialised, and as the name suggests, the demat account holds the securities in a dematerialised form. it is the most convenient way of holding all your securities electronically. demat accounts can be used to hold shares, bonds, mutual funds, exchange-traded funds, and government securities.
you can convert your physical shares into the dematerialised form and hold them in the demat account. the 3-in-1 account facility allows you to hold only one account for investing, savings, and trading. therefore, the investment has become easier, comfortable, and the safest. the benefit of holding a demat account is that the chances of physical damage or loss of shares are reduced to nil. securities are held in an electronic form that prevents your securities from theft.
while there are many ways to invest in mutual funds, such as direct investment, investment through a broker / distributor, lump sum investment and sip investment, investing in a mutual fund through a demat account helps you in many ways.
although direct investment in the mutual fund is cheaper, the number of benefits that come with a demat account is much more, and hence, it is recommended to use a demat account to invest in mutual funds.
use sip calculator or sip return calculator to know the amount of sip needed to invest every month to achieve your financial goals.