Why should I hold shares in demat account and is it compulsory for every investor to open a demat account to trade in the stock market?
asked
Holding shares in depository enables immediate transfer of the shares in case of purchases. The stamp duty to be paid on transfer of securities is not needed, all risks associated with physical certificates like fake securities, forgery, bad delivery etc. is not involved.
Also, since more than 99% of the settlement at the stock exchanges is taking place in the demat form, it is advisable that securities be held in demat form with any depository participant (DP).