There are various benefits of opening a demat account such as it is safe and convenient way to hold securities compared to holding them in physical form. No stamp duty is levied on transfer of securities held in demat form. A demat account offers instant transfer of securities thereby providing liquidity.
A demate account cannot be opened directly with CDSL (Central Depository Services (India) Ltd). It has to be opened only though a DP (depository participant) of CDSL.
After opening a demat account with CDSL, the investor is allotted a unique demat account number, which ensures debit/credit of securities only to the intended account. Thus, if an account number is keyed in incorrectly, the CDSL system will not carry out the transaction.