Having a Demat account today has become as important as having a bank account for various investment options. It helps to invest in securities like equity, derivatives, currency, futures and options, bonds and mutual funds. So, if you have a Demat account, here are some basic details that will help you in trading, applying for an IPO or closing an existing inactive Demat account.
What is a Depository (DP)?
The Depository (DP) is a financial institution that holds your financial securities and helps in trading your securities. In India, there are two DPs – Central Depositories Services India Limited (CDSL) and National Securities Depository Limited (NSDL). For trading, you have to open a Demat account with any of these two DP’s (CDSL/NSDL) through a Depository participant (your broker).
What is a Demat Account Number?
When you open a Demat account online or offline with your Depository Participant (your broker/brokerage firm), you receive a unique 16 digit number called the Demat account number. When you link your Demat account number with a trading account, you can trade in the stock market exchanges (NSE/BSE in India). The Demat account number is also known as beneficiary ID if you open it with CDSL (Indian Depository).
The format of the Demat account number varies based on the Depository. If your Depository is CDSL, you will receive a 16 digit numeric character, such as 9876543210987654. But if your Depository is NSDL, it will start with “IN” followed by a 14 digit number, such as IN98765432109874.
What is a Depository ID (DP ID)?
The Depository Participant Identification (DP ID) is the identification number provided by the Depository Participant (your broker). Knowing your DP ID can help you to apply for an IPO and even close your Demat account.
How to find your DP ID?
To find your DP ID, go to your Demat account number. The DP ID is the first 8 digits of your Demat account number and the Client ID is the last 8 digits of your Demat account number.
For example, if your Demat account number is 9876543210987654 with CDSL, then the DP ID is 98765432 and the Client ID is 10987654.
If your Demat account number is IN98765432109876 with NSDL, then the DP ID is IN987654 and the Client ID is 32109876.
Conclusion
A Demat account opens up new avenues for investing. So, knowing the basic details about your Demat account will help you operate the account smoothly and trading in securities. So, use your knowledge and become an informed trader.
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