Top 5 Advantages of Trading Online with Demat Account

A number of people open their demat accounts every year and begin trading online. They either use the website or mobile app of their broker to start investing in all kinds of securities, like shares, bonds, debentures, futures, and options.

Trading online helps them manage their investments in ways, which offline trading can never let them. Hence, today in India, millions of people are trading online in Tier-1, Tier-2, and even Tier-3 cities. So, what is making them trade online? 

About to open a demat account? Learn the benefits of trading online

1. Trade anywhere and anytime: If you have access to a laptop and an internet connection, an open demat account can let you buy and sell securities from anywhere and anytime. As you will be buying or selling securities in a dematerialised form, you will not have to worry about keeping paper certificates. Hence, it is extremely convenient.

2. Cheaper way of trading: It is well-established that online trading is much cheaper than the conventional way of trading, wherein an investor calls a broker to place a trade on his behalf. When you trade online, a broker’s overheads are significantly lower than the traditional way of trading. Hence, online trading is much cheaper.

3. Highly transparent: Online trading allows you to enjoy the highest standards of transparency. Brokerage houses tell you clearly about their charges, like account opening fees, brokerage fees, annual maintenance charges (AMC), etc. They even tell you how much goods-and-services tax (GST), stamp duty, and securities transaction tax (STT) you will be paying on your stock market transactions. On top of it, many depository participants provide an online brokerage calculator on their websites, which lets you know the amount of brokerage you will pay on a transaction. Overall, it results in a lot of transparency, as investors are not in the dark about their charges and taxes.

4. Easy to keep track: Online demat accounts allow you to track your investments from anywhere and anytime. Your location does not matter. You do not have to call your broker. You do not have to gather your share certificates. All you have to do is login to your demat account and you will have all the details about your securities at your fingertips. You will be able to see how the value of your portfolio changes from second to second, which will help you become an efficient trader.

5. Real-time updates and insights: A demat account provides you with real-time updates and insights into all kinds of securities, which help you make informed decisions. These real-time updates are in the form of analyst recommendations, technical charts, and news & developments, which can have a huge impact on the price of securities. Such updates help you analyse why the price of a security is moving up or down. Besides, you will have updates on your fingertips 24 by 7. With such insights and convenience, online demat accounts will help you become a smart investor.

Conclusion

Trading online with a demat account offers several advantages. The best part is the ease and convenience with which you can invest in securities. However, the same ease and convenience can also make you invest carelessly.

Hence, whether you are an investor or a trader, before you even log in to your demat account, you should have your objective ready. In other words, why do you want to invest or trade? Ask yourself, “What kind of money am I trying to make and for what objective?” and “Do I have the financial and emotional capacity to take the risks required?”

You should invest only with absolute clarity of mind and realise that investing is not a race that you have to win. Instead, if you invest wisely, you can create a sufficient corpus of funds for your and your family's needs.