What are the benefits of participating in a depository?
The benefits of participating in a depository are:
- Immediate transfer of securities.
- No stamp duty on transfer of securities.
- Elimination of risks associated with physical certificates such as bad delivery, fake securities.
- Reduction in paperwork involved in transfer of securities.
- Reduction in transaction cost.
- Nomination facility.
- Change in address recorded with DP gets registered electronically with all companies in which investor holds securities eliminating the need to correspond with each of them separately.
- Transmission of securities is done by DP eliminating correspondence with companies.
- Convenient method of consolidation of folios/accounts.
- Investments in equity, debt instruments and Government securities held in a single account.
- Automatic credit of shares, arising out of split / consolidation / merger etc., into demat account.
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What are the facilities offered by DP account?
Following facilities are offered:
- Dematerialisation i.e., converting physical certificates to electronic form.
- Rematerialisation i.e., conversion of securities in demat form into physical certificates.
- Facilitating repurchase / redemption of units of mutual funds.
- Electronic settlement of trades.
- Pledging/hypothecation of dematerialised securities.
- Electronic credit of securities allotted in public issues, rights issue.
- Automatic receipt of non-cash corporate benefits such as bonus, in electronic form.
- Freezing of demat accounts, so that the debits from the account are not permitted.
- Nomination facility.
- Services related to change of address.
- Transmission of securities.
- Other facilities viz. holding debt instruments in the same account, availing stock lending/borrowing facility, etc.
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Can I open more than one account?
There is no restriction on the number of accounts you can open.
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Do I have to keep any minimum balance of securities in my account?
No. The depository does not prescribe any minimum balance. You can have zero balance in your account.
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Can I open a single account for securities owned in different ownership patterns such as securities owned individually and securities owned along with my spouse?
No. The demat account must be opened in the same ownership pattern in which the securities are held in the physical form. e. g. if one share certificate is in your individual name and another certificate is jointly held in your and your spouse's name, two different accounts would necessarily have to be opened.
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