Account that converts the shares from the paper form into an electronic form is called as dematerialized account Demat account
Zee Media Bureau
Account that converts the shares from the paper form into an electronic form is called as dematerialized account Demat account.These accounts are almost similar to pass books offered by the banks where you have opened an account. Using the Demat account you can easily buy or sell shares of different companies using your Demat account. All the transactions are entered into it just like it's done in the bank passbook.
Opening a Demat Account
In order to open a Demat Account one has to follow these general instructions:
Once the documentation is over, the DP who is basically a stock broking firm, bank, sub-broker etc. (e.g.INDIABULLS, ShareKhan, IIFL, ICICI etc.) demands a minimum cheque in your name in case you want to start with purchase of shares.DP purchases dematerialized shares in your name and saves them in your Demat Account and charges a minimum broking charge.
Advantages of trading through a Demat Account: