Disadvantages of physical shares

Answer 1

Physical shares's disadvantages are the advantages of Demat Account.

if you understand what is Demat Account and its services you will get to know it well.

1. The biggest benefit is that you do not need to hold securities in physical form rather they are kept in electronic form and therefore the risks of losing shares due to theft, fire, flood and earthquake are eliminated.
2. One can have instant transfer of stocks from one account to another and therefore the whole process of buying and selling becomes fast which in turn increases the efficiency and effectiveness of Stock Market as a whole.
3. Since they are hold in electronic form there is no stamp duty on transfer of securities which reduces the transaction costs associated with buying and selling of shares.
4. Demat account is not only for equity shares but you can keep mutual funds, gold exchange traded fund, preference shares in it which makes it easier for individuals to keep track of their investments as they do not have to check several account, they just have to check their demat account for knowing about their portfolio.
5. An individual having demat account can even trade for 1 share also which was not the case when you hold them in paper form.

hope it might help you :)