Basics of Stock Market - Beginner

What is a difference between Remat and Demat?

Anyone who wants to invest in the stock exchange must be familiarized with terms such as dematerialisation and rematerialisation. This article will explain the differences between dematerialisation and rematerialization. Electronic shares are issued when you purchase shares in a company. These shares can be stored in a demat bank. Investors used to have difficulty storing shares in physical form. The transaction was slow because the shares needed to be sent by postal mail. Dematerialization was created to eliminate all of these. This is how you can convert your physical shares to electronic format. All electronic shares are saved in NSDL and CDSL. To trade on the share market, you first need to open a trading and demat account with a SEBI-registered stockbroker. There are two types: full-service brokers and discount brokers. A full-service broker is the best choice for beginners to the stock market. They provide guidance and support through research recommendations and personalized financial advice.

Rematerialization is the conversion of electronic shares into physical shares. This is why someone should be interested. These are only for investors who hold a small number of shares and don’t wish to pay an annual maintenance fee. If you have physical shares, there is no maintenance fee. This is the reverse of dematerialization.

Procedure for Dematerialization:

1. You need a demat account for this which can be provided by a Depository Participant/Stockbroker.
2. 2.Obtain the DRF (Dematerialization Request Form) and send it to the DP/stock brokerage along with your physical shares certificates.
3. DP will send your request to the depository and RTA.
4. Registrar completes the dematerialization and informs DP.
5. 5. Your account is credit with electronic shares
Rematerialization Procedure:
1. Send the RRF (Rematerialization Request Form) to DP.
2. 2. The request is sent to RTA by the DP.
3. RTA issues a new physical certificate and forwards it to you.
Feature    Dematerialisation    Rematerialisation
Definition    Conversion of physical shares into electronic format    Conversion of electronic shares to physical form
Maintenance costs    An annual maintenance cost is required    There is no maintenance fee
Drawback    -    There are high chances of theft and forgery
Account maintained by    Participant in the Depository    Company
An investor should know the advantages of a Demat account. You can sell your shares electronically if you want. It also speeds up the transaction. I hope you have a better understanding of the differences between demat and regat. To achieve your short-term and long-term goals, open your demat account.

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