Why demat account is required?

Demat account is required if you are planning to invest in IPOs, Mutual Funds, Stocks (Delivery trading), government securities and bonds. All these financial instruments rest in your demat account until you sell or redeem it. Online trading in equity delivery segment is not possible without having the demat account in place. IPO shares that you receive after allotment also rest in your demat account. Applying in IPO via ASBA net banking requires your demat account details in the application form. Mutual Funds units, govt securities and corporate bonds also rest in your demat account.