How Does a Demat Account Work?



Physical certificates are provided to show ownership of financial products when a person decides to invest in them. However, managing physical certificates can be laborious, and there is always a chance that they will get damaged, lost, or stolen. These certificates are transformed into electronic form and kept with a registered Depository Participant (DP) via a Demat Account.

Physical certificates are transformed into digital form during the dematerialization process, and vice versa during the re-materialization process. But with Demat Accounts' efficiency and convenience, the requirement for re-materialization is much diminished, if not completely gone.

Read also: Maximizing the Advantages of a Demat Account: A Guide to Secure and Effective Investments

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