How to open Demat Account - Depository Services In India

An Important function of depository services is holding securities in the form of certificated or uncertificated(dematerialized). In the depository services system, securities are held in depository accounts, which are similar to holding funds in bank accounts. As transfer of ownership of securities is done via general account transfers.

Types of Depository Services: - 2 Types of Depository Services in India

1-      NSDL (National Securities Depository Limited)

2-      CDSL (Central Depository Services Limited)

NSDL (National Securities Depository Limited): - Very high level of central securities depository in India based in Mumbai. It is initiated by institutions of national stature responsible for the economic growth of whole nation. NSDL is promoted by NSE (National Stock Exchange), IDBI (Industrial Development Bank of India Limited), UTI (Unit Trust of India), and some of prominent banks in the country have taken a stake in NSDL.

SBI, HDFC Bank, Axis Bank, OBC, Dena Bank, Canara Bank, Union Bank of India etc.

CDSL (Central Depository Services Limited) : -This is the second Indian central securities depository based in Mumbai.

CDSL is promoted by Bombay Stock Exchange (BSE),  State Bank of India(SBI), Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Union Bank of India.

Demat refers to a dematerialized account.
Though the company is under obligation to offer the securities in both physical and demat mode, you have the choice to receive the securities in either mode.

By the company that offers the securities in both physical and demat mode, So demat mode is the form digital sequence of formulation (shares & stocks) that makes secure mode for you hard earned money. If you wish to have securities in demat mode, you need to put name of the depository and the depository participant with whom you have depository account in your application.

HOW TO OPEN A DEMAT ACCOUNT?

 

In Just two-step process:
You approach a DP and fill up the Demat account-opening booklet. The Web sites of the NSDL and the CDSL list the approved DPs. You will then receive an account number and a DP ID number for the account.

• First fill the application form or booklet given by you broker and after that you will get account number and a DP Id.
• Secondly, NSDL and CDSL authorities will approve your DPs.

Now you can do stock trading according to you research departments that will be beneficial for you returns.

Author - Stock Broker