Benefits Of Dematerialization

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  • 23 Feb 2023
Benefits & Importance Of Dematerialization

Dematerialisation is the process of converting paper certificates of shares, bonds, or other investments into electronic form. It helps eliminate the risk of loss, damage, or forgery. Moreover, dematerialisation enables you to hold various types of securities in a Demat account, making it easier to buy and sell securities online. This blog will cover the benefits of Dematerialisation in detail.

Key Highlights

  • Dematerialisation eliminates the need for physical certificates, reducing the risk of loss or damage.

  • Investors can trade securities online as they are stored in digital format.

  • Dematerialisation enables you to hold several securities in a single Demat account.

The following are the key benefits of Dematerialisation.

  • Convenience

The introduction of Demat accounts has made it easy to trade in the Indian stock market. It enables you to carry out transactions electronically. Moreover, the investor can access the Demat account online. One can track all his investments conveniently.

  • Safety

Dematerialising securities and holding them in a Demat account offers a secure way to do stock market transactions electronically. This eliminates the risks of theft, damage, and loss due to holding shares in physical form.

  • Paperless Transactions

Dematerialisation facilitates paperless transactions while trading. As shares and other securities are converted into electronic form, all the transactions can be made digitally. This also reduces the administrative costs for the listed companies.

  • Avail Loan Facility

You can obtain a loan against the dematerialised holdings. You can use the securities and shares in your Demat account as collateral, and avail loans against them.

  • Monitoring Investments

Dematerialisation allows you to store all your investments in one place in a Demat account. This helps you to monitor your investments online from anywhere. Thus, you can track your portfolio regularly and make adjustments whenever required.

  • Ease in Receiving Corporate Benefits

Dematerialisation of securities allows you to get corporate benefits like dividends, interest, refunds, etc., directly in your Demat account. Moreover, other benefits, like stock splits, bonus shares, rights shares, etc., are also updated in the Demat account.


Dematerialisation brought a revolution in the Indian stock market. It made trading financial securities quite easier, safer, and more efficient. The risks of losing, theft, or damage of paper certificates have been reduced by dematerialisation. Additionally, it eliminates the need to go physically collect documents as it enables electronic credit of bonuses and loans against shares. Moreover, you can monitor the investments anytime and anywhere.

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