InvestorQ : What are some of the key benefits of the depository system over physical shares?
Bhavik Nehru made post

What are some of the key benefits of the depository system over physical shares?

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vidhya Laxmi answered.
3 years ago
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Some of the key advantages of the depository system include:
  • Immediate transfer of securities
  • No stamp duty on transfer of securities
  • Elimination of bad delivery, fake securities, etc
  • Reduction in paperwork involved in the transfer of securities
  • Substantial reduction in transaction cost
  • Facilitate to nominate reducing the hassles in transmission
  • Change in address recorded with DP gets registered electronically with all companies in which investor holds securities
  • Eliminates the need to correspond with each of them separately
  • Transmission of securities is done by DP eliminating correspondence with companies
  • A convenient method of consolidation of folios/accounts for the sake of simplicity
  • Holding of multiple investments in asset classes like equity, debt instruments and Government securities in a single account
  • Puts your investing activity in auto mode. You get automatic credit into demat account, of shares, arising out of split/consolidation/merger etc.
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