A Demat account, short for Dematerialized account, is an account that allows investors to hold their shares and securities in an electronic form instead of physical paper certificates. This system of holding shares was introduced in India in 1996 to eliminate the risks and hassles associated with physical share certificates.

Key Features of a Demat Account

• Electronic Holding: Shares and securities are held electronically, making it easier to manage and transfer them.
• Safety and Security: Reduces the risk of loss, theft, forgery, or damage to physical certificates.
• Convenience: Facilitates easy and quick transfer of shares and securities.
• Cost-Effective: Eliminates the need for stamp duty on transfer of securities and reduces transaction costs.