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Demat account is an account wherein you can hold shares of various companies in the dematerialized [electronic] form.
You can open a demat account with a share brokerage or a bank.

DeMat account

You should necessarily have a PAN card for opening such an account.

You can operate your account by giving the filled in delivery instruction slips provided for selling the shares in your account.

The shares you buy will get credited to your account a few days after you buy.

In India, a demat account, the abbreviation for dematerialized account, is a type of banking account which dematerializes paper-based physical stock shares.

The dematerialized account is used to avoid holding physical shares: the shares are bought and sold through a stock broker.

This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares.

Various benefits for which Demat account is must are:-

• A safe and convenient way to hold securities;

• Immediate transfer of securities;

• No stamp duty on transfer of securities;

• Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.;

DeMat Account

• Reduction in paperwork involved in transfer of securities;

• Reduction in transaction cost;

• No odd lot problem, even one share can be sold;

• Nomination facility;

• Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc.

• Holding investments in equity and debt instruments in a single account.

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