What is Demat account?

A demat account or dematerialized account is an account which allows investors to hold shares in an electronic form. A depository is similar to a bank. A demat account holds the certificates of financial instruments like shares, bonds, government securities, mutual funds etc. It involves the process of converting physical shares into electronic form for easy access and trading.

It enables you to electronically buy and sell shares on the stock market, without having to exchange physical share certificates and paperwork. As per SEBI guidelines, the Transfer of shares in physical form stopped from April 1, 2019.