What is demat of physical shares?

'Demat' refers to dematerialization, a process by which physical securities are converted into electronic format. Therefore, a trader can use a Demat account to hold, transfer, and transact securities without the hassles of dealing with physical securities. As a result, trading has become a safer, quicker, and much more efficient method of storing securities and executing trades.

Advantages of Dematerialized Shares

The main motive behind investors searching how to convert physical shares to Demat online is the policy where SEBI has announced that investors must convert every physical share certificate into electronic form. SEBI’s direction is not based on assumptions but on valid research that this process accompanies numerous benefits over the holding of physical share certificates. Once an investor knows how to convert physical shares to Demat, it will provide the following benefits:

• Safety: Dematerialization eliminates the chances of shares being lost, forged or misplaced, increasing the safety of the holding. They are stored in secure depositories, which have made theft a thing of the past.
• Convenience: Thanks to the electronic nature of dematerialized shares, the problems related to their storage and maintenance has been eliminated. You won’t have to deal with lost or damaged certificates anymore.
• Accessibility: All the records of shares are stored electronically and online. This allows you to access dematerialized shares from almost anywhere and anytime using the internet.
• Cost-efficiency: Electronic trading doesn’t require cumbersome paperwork, which reduces a lot of expenses.
• Flexibility: Dematerialization led to increased flexibility and therefore improved access for small investors. Now, one can buy/sell even a single share without any restriction on the numbers.