Shortcomings of Demat Account

1. SHORTCOMINGS OF DEMAT
ACCOUNT

2. DEMAT ACCOUNT
• A demat account is an Indian term for a dematerialized account that holds
financial securities digitally and to trade shares in the share market.
• In India, demat accounts are maintained by two depository organizations:
the National Securities Depository Limited and the Central Depository
Services Limited.

3. SHORTCOMINGS
• Yearly Fees
• Technology Literate
• Trading Shares At A High Frequency
• Stockbroker Control
• Additional Agreements And Procedures

4. YEARLY FEES
• Whether you keep one security in a Demat account or
many, you will likely need to pay a yearly fee to cover
maintenance costs.
• A separate fee may apply depending on the bank or
location hosting the Demat account.

5. TECHNOLOGY LITERATE
• You must go online and be familiar with fundamental
computer functions to trade, analyze the stock
market, access your Demat account, and do other
activities that help you manage your portfolio.
• It is challenging for people who are not computer
literate to manage a Demat account online.

6. TRADING SHARES AT A HIGH FREQUENCY
• The dematerialization of shares has sped up. This
forces shareholders and investors to track shares
online quickly, which can seem advantageous.
• It also forces you to trade frequently, which prevents
you from taking advantage of profitable long-term
investing opportunities. Trading could more frequently
result in losses than substantial, long-term gains.

7. STOCKBROKER CONTROL
• The ability to conduct business on the stock market is
granted to several stockbrokers.
• You must be vigilant as an investor with a Demat
account to monitor your stockbroker's activities
regularly.

8. ADDITIONAL AGREEMENTS AND PROCEDURES
Additional contracts might be included by some
depository participants. So, from an investor's
standpoint, using a Demat account has its drawbacks
when employing additional contracts.