If you wish to reap attractive returns and look beyond the traditional bank investment vehicles, invest in the Stock Market. It has helped many investors soar high by earning them extraordinary profits. Stock investments are undoubtedly an excellent way of wealth creation. However, you should always observe caution as the market can be unpredictable. Savings, Demat, and Trading Account are three key accounts you need for stock investments.
Savings Account is where you can deposit money to carry out daily transactions. A Demat Account is a depository that holds your shares or securities in dematerialised format. Trading Account allows you to buy and sell shares. They should be linked to ensure seamless transactions. Demat and Trading Accounts generally work together. However, you may have to link your Demat Account to your Savings Account by yourself unless you opt for a 3-in-1 Account.
Following are the reasons why you should link your Demat Account with your Savings Account:
Make instantly profitable trades
The market can be very unpredictable. If you notice a favourable market standing, you should act immediately to make good profits. When your Demat Account is linked to your Savings Account, you can buy and sell shares within seconds.
Apply for IPOs
Initial Public Offering is a process where a privately owned company goes public. By applying for an IPO, you can invest in a company with tremendous growth potential at an affordable value. The Application Supported by Blocked Amount allows you to invest in IPOs without the investment amount directly debited from your Savings Account. The investment amount gets only debited when shares are allocated.
Park investment earnings
Besides shares, you could invest in Mutual Funds and money market instruments through a Demat Account opening. For example, you could invest in Government and Corporate Bonds and other securities. When you redeem your investment, the returns can easily be deposited in your Savings Account. This way, you can secure and easily access your investment earnings.
Track investments
When you invest in the Stock Market, you will likely make several trades on the go. Plus, if you have invested in a market-linked instrument like Mutual Funds, Equity transactions are made simultaneously. Keeping up with so many transactions can be challenging. Hence, when opting to open Demat Account online, linking it to your Savings Account helps. Both Demat and Savings Accounts come with detailed account reports.
This gives you a complete summary of the credits and debits made from the accounts over the month or quarter. You can check these reports to track your investments. You also are alarmed if any unauthorised transactions are made.
