Demat account is one of the first steps for investing in stock markets. However, is it absolutely necessary to have one? The answer to this question is given below.
Is a Demat account mandatory?
The issue of securities in the dematerialized form was introduced in 1996. Earlier all the securities were held in physical form but were later digitized for better regulations and reduced paperwork. Therefore, now for any investment in the share market, investors need to open a Demat account and have a detailed account of all the securities like mutual funds, shares, bonds, etc. These accounts are maintained by the two central depositories in the country CDSL and NSDL. The Demat account and a trading account are needed to hold shares and trade in shares.