Demat Account

A Demat (Dematerialised) Account is an electronic account used to hold securities — including shares, bonds, mutual fund units, ETFs, and government securities — in digital form, eliminating the need for physical share certificates. In India, Demat accounts are maintained by two depositories: NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited), through registered Depository Participants (DPs) such as banks and stockbrokers. Opening a Demat account is mandatory for investing in listed equity shares on NSE or BSE. The account records the investor's security holdings, credits shares upon purchase or IPO allotment, debits shares upon sale, and reflects corporate actions such as bonus shares, dividends, splits, and rights issues. Annual maintenance charges (AMC) are levied by the DP — typically ranging from ₹300 to ₹800 per year. SEBI regulations require linking of Demat accounts with PAN and Aadhaar for KYC compliance.