Keep a Track of your Equity Holdings with DEMAT Account
The world of stock market has evolved significantly over the last few decades. Several innovations have been introduced since the last few decades. Beginning from the days of ring trading where several investors and stock market traders use to gather in the market to the current times of online trading, significant innovations have been introduced in the market, thus helping individuals not only to book profits but also to conveniently handle trades.
Gone are the days when paperwork was the only medium of trading stocks. Where brokers use to take orders from the traders, and then return them with physical copies of shares. However, with the development of technology, this age-old method of holding stocks in physical format has now become dormant. Instead the regulatory bodies, in association with stock exchanges and depository participants, have now launched DEMAT account services.
What is a DEMAT account?
DEMAT is the abbreviation for Dematerialization account. It is a common repository available for holding stocks provided by the exchange in electronic format. Unlike olden days, all your stocks are now available in a single account, thereby helping you overcome hassles of handling stocks in physical format.
DEMAT accounts are provided by depository participants in India. There are two major depository participants in the country:
1> NSDL – National Securities Depository Limited
2> CDSL – Central Depository Services Limited
Brokers, which are associated with these depositories, will provide DEMAT services from NSDL or CDSL. Both the depository participants are able to interface with a trading account linked with NSE and BSE exchanges in India.
How to Open a DEMAT account?
Banks or share brokers provide DEMAT services to individuals. Any individual can now approach a bank or a private broker associated with either of the depositories to avail a DEMAT account. Depositories (NSDL and CDSL) provide a list of DPs or Depository Participants which include banks, private brokers, or established NBFCs.