Opening a Demat account is just the beginning. A Demat account offers a range of functions beyond buying and selling shares. Once you’ve understood what a Demat account is and how to open one, it’s essential to know how to make the most of its many features. Here’s a comprehensive guide on the various uses of your Demat account.

1. Dematerialization and Rematerialization of Shares

• You can convert physical share certificates into electronic form by submitting a Dematerialization Request Form (DRF) to your Depository Participant (DP).

• If the shares are not yet in your name, use a Transfer-cum-Demat (TCD) form.

• If needed, you can also convert demat shares back into physical form using a Rematerialization Request Form.

2. Nomination Facility

• You can appoint a nominee for your Demat account to ensure smooth transmission of holdings in the event of your demise.

• Having a nominee simplifies legal procedures and ensures your investments are passed on without delays.

3. Buying and Selling Shares

The core function of a Demat account is to facilitate trading:

• Shares bought through your trading account are automatically credited to your Demat account.

• When you sell shares, the relevant quantity is debited from your account.

4. Portfolio Consolidation and Monitoring

• A Demat account can hold:

  • Equities

  • Mutual funds

  • Sovereign Gold Bonds (SGBs)

  • Exchange-Traded Funds (ETFs)

  • Corporate bonds and more.

• Most brokers allow real-time portfolio tracking through integrated online dashboards, giving you a clear view of your net worth.

5. Corporate Actions Made Seamless

• Corporate benefits such as bonus shares, stock splits, and rights issues are automatically credited to your Demat account.

• Dividends are credited directly to your registered bank account if IFSC details are updated.

• No additional paperwork is required to claim these benefits.

6. Applying for IPOs

• When applying for Initial Public Offerings (IPOs), you simply need to mention your Demat account number.

• If shares are allotted, they are directly credited to your account on the allotment date.

7. Centralized Communication Hub

• Any changes such as:

  • Address

  • Bank details

  • Signature

  • Contact information
    can be updated through your DP.

• Once updated, these changes are automatically reflected across all companies in which you hold shares.

8. Power of Attorney (POA) for Account Operations

• You can authorize someone (e.g., a family member or broker) to operate your Demat account by executing a Power of Attorney (POA).

• This is particularly useful if you’re abroad or unable to handle transactions personally.

• POA allows buying/selling and managing securities on your behalf.

9. Transfer and Transmission of Shares

• Transfer of shares between Demat accounts (e.g., consolidating holdings) can be done via off-market transfers.

• No capital gains tax applies to transfers between your accounts.

• In case of death, transmission of shares to a legal heir or nominee is handled easily if a nominee is registered.

10. Holding Mutual Funds in Demat Form

• You can hold open-ended mutual funds in your Demat account by submitting a Conversion Request Form (CRF) to your DP.

• Alternatively, mutual fund units bought on platforms like BSE MF are credited directly to your Demat account.

In Summary:

Function	Description
Dematerialization/Rematerialization	Convert physical shares to/from electronic form
Nominee Registration	Appoint a legal beneficiary for smooth transmission
Trading	Buy/sell shares via linked trading account
Investment Monitoring	Track stocks, mutual funds, ETFs, bonds, etc. in one place
Corporate Actions	Auto-credit of bonus, splits, and dividends
IPO Application	Receive allotted IPO shares directly in Demat
Centralized Updates	Update details like address/bank across all holdings via DP
Power of Attorney	Authorize others to transact on your behalf
Transfer/Transmission	Move or inherit shares between accounts
Mutual Fund Holding	Hold mutual funds in electronic format