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Demat or SOA: How to Choose the Right Account?

Demat accounts and SOA are both tools for investors. When it comes to cost efficiency, SOA can be a better choice since it has no associated costs.

By Advertorial Desk 30 Sep 2024

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Do you wonder where your securities go after you purchase them? As an investor, you may choose to store your purchased securities in either of the two ways; Demat account and SOA. But how do you know which is the best choice for you? In this article, you can learn about the differences between Demat and SOA to make an informed decision.

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What is a Demat account?

A dematerialised account or Demat account is an account where traders and investors can store securities. Bajaj Broking offers a free Demat account—a secure and electronic way to store your investments, such as shares, bonds, ETFs, and mutual funds. It acts like a digital vault, where you can hold your securities safely. All transactions, from buying to selling stocks, are possible only through a Demat account, making it essential for traders and investors.

What is SOA?

SOA stands for Statement of Account. When you invest in a mutual fund company, you will be provided a statement of account of SOA. This SOA is a document that has all the details of transactions and holdings of your account. It includes purchases, dividends, redemption, and the current value of all the mutual fund investments.

The mutual fund company sends the SOA to investors on a regular basis. It can be sent either in physical or electronic form. The SOA can be used when the investor wants to withdraw shares.

Differences Between the Demat Account and SOA

As you can read above, both demat and SOA are the accounts where you can hold your securities. However, these two are different on multiple grounds. Here is the table explaining the difference between the two:

Demat Account	Statement Of Account
Demat accounts are managed by CDSL or NSDL	SOA is issued by AMC (Asset Management Company)
Demat accounts can hold shares, ETFs, bonds, and mutual funds	SOA can also hold mutual funds
There can be opening, maintenance, and transaction fees associated with Demat account charges	There are usually no charges associated with Statement of Accounts
Demat accounts are operated in an electronic form	SOA is traditional, paper documents
You can access your account statement online at anytime	To access account details, you can raise a request and receive the same in your email
You need to buy or sell securities in whole units	You can withdraw any specific amount and not necessarily whole units
Since it is in electronic form, demat accounts offer high security and low risk of theft or loss	SOA are in physical form and so, associated risks of theft and loss are higher

The Right Trading Account: Demat vs SOA

Now that you are aware of the differences between the Demat account and SOA, it may become easier for you to choose one.

For investors looking to explore a broader range of financial instruments, Bajaj Broking’s Demat account offers the flexibility to invest in shares, bonds, and ETFs, all while providing a safe and secure platform.

Depending on your personal preferences, you may choose either of the two. If you are looking for trading and mutual fund investments, a demat account could be the best choice for you. However, if you are only planning to invest in mutual funds, SOA can be the ideal choice.

Conclusion

Demat accounts and SOA are both tools for investors. When it comes to cost efficiency, SOA can be a better choice since it has no associated costs. However, demat offers you the flexibility of investing in different funds. Make a calculative choice so it aligns with your long-term financial and investment goals.

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