How To Convert Physical Shares To Demat - A Step By Step Complete Guide

Recently NSDL came up with data on Demat accounts in India. The data is not at all surprising looking at the growth of the Indian Capital Market. The title said “ India Surpsasses 100 mn mark in Demat accounts”

Let’s see How Dematerialisation of Shares can help you in your wealth creation journey?

What is Dematerialisation?

Dematerialisation of shares is the process by which convert physical shares into a digital form. Then, in a depository account that you open, these Dematerialised shares are stored. According to the current regulations, Dematerialisation of your shares is necessary if you want to sell or transfer the shares. 

Benefits of having a Demat Account:

Simple Monitoring and Access

Fully online-operated Demat accounts give you easy access from the comfort of your home to your trading account. You can quickly trade, monitor, or access your account regardless of where you are or the time.

Safety features

Depositories in India allow you to use 2FA (two-factor authentication), which removes the dangers connected to owning physical shares in the form of damage, loss, or theft. For many people, this benefit is essential since it gives them the confidence they need to enter the trading market.

Quick and practical

Digital formats are used while trading online with a Demat account, which speeds up and streamlines the process. With the touch of a finger, you can transfer, sell, or buy assets and funds.

Time Saving

Trading of physical shares is time-consuming as it involves a lot of processes. Trading Dematerialised shares is easy & seamless. 

Benefit transfer becomes easy

All the benefits as a shareholder like Bonus shares, rights shares, dividends, are transferred immediately to shareholder accounts. In case of physical shares such processes are time-consuming. 

Opening a Demat account

allows you to consolidate all of your bonds, stocks, other securities, shares, and investments into one location. Trading becomes easy and systematic as a result. In fact, nowadays, Insurance policies & educational degrees can be Dematerialised. 

Why Dematerialisation:

Shares might be held in the form of share certificates prior to 1997. This process was ineffective and riddled with errors. Share certificates` security was a concern since they may be lost or damaged.

The shares had to be purchased via a broker with a transfer form included. The entire process, which was hampered by problems including signature mismatches, payment check errors, and lost share certificates lost in transit, took close to 30 days.

These problems were resolved by Dematerializing shares. Dematerialised shares are authenticated electronically using ISIN, so you don`t need to worry about their legitimacy (a system of assigning a unique number to a particular share). The electronic storage system customised for Dematerialised shares has also eliminated the issues with maintenance and storage.

A Step By Step Guide To Convert Physical Shares into Demat Form. 

Conclusion:

The transition to electronic share trading was made possible by convert physical shares to demat form. It has significantly aided in the expansion and acceptance of stock trading among the general populace. Dematerialisation takes very little user engagement, despite the fact that it could seem like a laborious procedure. It should take 2 to 3 weeks to convert all physical stock certificates to Dematerialised stock certificates. You should be aware that only shares that are actively traded on the stock exchange may be Dematerialised. Whenever you choose once your Demat account has been credited, you can sell or transfer your shares.

FAQs:

• Can I still convert physical shares into Demat accounts?

Yes, you can open a Demat account and convert your physical shares to Demat. Your physical shares are Dematerialised and transformed into an electronic format via a Demat account. Make sure that the account is being opened in the same name as the shareholder. Joint owners must all have their names on the Demat account when it is opened.

• Is the Demat of physical shares required?

It is required that you Demat your physical shares. Dematerialisation makes trading and investment easier and reduces the opportunity for fraud. The Securities and Exchange Board of India established this rule (SEBI). All investors are required by SEBI to only trade and invest in Dematerialised shares. You must open a Demat account in order to accomplish this.

• What features does the physical form have?

Physical shares are share certificates that detail your ownership stake in an organisation. They were issued to investors each time they bought shares of a corporation, even though they are no longer used. Until they were redeemed, investors had to securely store these certificates. However, Demat shares, which can be kept in a Demat account in a Dematerialised or electronic format, have now supplanted physical shares.

JK Securities is a registered stock brokerage company with NSE, BSE & SEBI. It holds a Depository participant licence of NSDL.