Demat accounts have become synonymous with share market trading. Providing investors with a convenient and secure platform to hold and trade shares electronically. However, demat account services go beyond just share market trading. They offer a range of additional services that cater to the diverse needs of investors. In this article, we will explore the various demat account services available beyond share market trading.
Bond and Debenture Holding: Demat accounts allow investors to hold bonds and debentures in electronic form. Bonds and debentures are debt instruments issued by companies and governments to raise capital. Holding these instruments in a demat account provides share market investors with a secure and convenient way to track their bond and debenture holdings, share market receive interest payments. And participate in corporate actions related to these securities.
Mutual Fund Investments: Demat accounts enable investors to hold and transact in mutual funds electronically. Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities. Holding mutual funds in a demat account provides investors with a consolidated view of their mutual fund holdings. Making it easier to track and manage their share market investments. It also simplifies the process of buying, selling, and switching between different mutual fund schemes.
Initial Public Offerings (IPOs): Demat accounts offer investors the opportunity to participate in initial public offerings (IPOs) of companies. An IPO is the process through which a company goes public by issuing shares to the general public for the first time. Investors can apply for IPO shares through their demat accounts, making it convenient and accessible. Holding IPO shares in a demat account ensures easy tracking of allotments, subsequent trading, and receiving dividends or bonus shares.
Rights Issues and Bonus Shares: Demat accounts facilitate the seamless handling of rights issues and bonus shares. When a company announces a rights issue. Existing shareholders are given the opportunity to purchase additional shares at a discounted price. Demat accounts ensure that the rights entitlements and subsequent shares are directly credited to the investor’s demat account.Â
E-voting: Demat account holders have the option to participate in e-voting for company resolutions. Companies seek shareholder approval on various matters through voting, and demat account holders can cast their votes electronically through their demat accounts. E-voting provides a convenient and secure way for share market investors to exercise their voting rights and have their say in the decision-making process of the companies they have invested in.
Pledging and Lending: Demat accounts also offer services like pledging and lending of securities. Investors can pledge their securities held in the demat account as collateral for availing loans or margin requirements. Similarly. Share market investors can lend their securities to earn additional income through securities lending programs facilitated by demat accounts.
Thus, demat account services extend beyond share market trading. Catering to the diverse needs of investors. From holding bonds and debentures to participating in IPOs. Rights issues, and bonus shares, demat accounts offer a range of services that simplify and streamline investment processes. Additionally. Demat accounts support mutual fund investments, SIPs, e-voting, and provide opportunities for pledging and lending of securities. Whether you are a retail investor or a seasoned trader, demat account services provide a comprehensive platform to manage and grow your investments in a secure and efficient manner.
