Demat of Shares

Many investors do not know, what is the difference between the Demat and the Trading account?

The reason for this is that when you open an account with your broker, then he opens a Demat and trading account simultaneously. Friends, we would like to tell that there is a huge difference between the Demat and trading account.

Demat account means putting the shares in electronic form. There are only two companies in India who hold our shares in Demat form.

One is CDSL and the other is NSDL. CDSL means Central Depository Services India Limited and NSDL means National Securities Depository Limited.

NSDL was founded in 1996. This is India’s largest depository. NSDL is promoted by NSE (National Stock Exchange). They have World Class Infrastructures which keep our shares safe. Before 1996, shares were kept in physical form. When the shares were in physical form, it was very difficult to handle them, or to transfer them. Due to all these problems, the Depositories Act was brought in 1996 and the NSDL formation took place. Since the practice of Demat started, the life of the investor became very easy. Transfers of shares have become very easy after the Demat arrives. This was the biggest revolution of the Capital Markets. This has not only made the life of Brokers easy but also drop the cost of printing shares in physical form and tracking easy.

Then in 1999 another Depository company was born. Its name was CDSL. It is promoted by BSE (Bombay Stock Exchange). The goal behind forming the CDSL was to give the Depository Services Affordable Rate to all Market Participants.

Now we have come to know that our shares are kept in the Demat form either with the CDSL or NSDL. But before placing shares in Demat, you should have shares too. Shares are bought and sold in the stock market, and for doing this you must have a Trading account.

Trading account

There are many stock brokers in India, such as Zerodha, Angel Broking, Anand Rathi, HDFC Securities, etc. who provides the services of the opening of trading account. All these stock brokers are then connected with either CDSL or NSDL or with both. All these stock brokers are also called DPs (Depository Participants) in the language of the stock market.

These Stock Brokers provides a trading platform such as Kite (very popular trading App of Zerodha) or Angel Broking App where one can buy or sell shares through stock exchanges or through off-market route. Once you buy these shares then CDSL or NSDL holds these shares in their depository till further action.


Suppose you have a Trading Account with Angel Broking. If you buy 100 shares of HDFC Bank and then after T+2 days the shares will reflect in your account.

Here Angel Broking is providing the platform to buy shares and NSDL or CDSL is providing the services of keeping these shares in electronic form.

How do I know whether my stock broker is registered with NSDL or CDSL?

By carefully examining the number format of Demat Account we can easily identify whether the stock broker is registered with CDSL or NSDL.

Demat Account = DP ID + Client ID. (16 Characters ).

DP ID is the unique identification of the Broker. Every broker gets a unique number from CDSL or NSDL.

Client ID is the unique identification of the Client. Every client gets this unique number which represents his/her portfolio.

In CDSL, all these characters are numbers (1234567891234567) first 8 digits are DP ID and next 8 digits are Client Id whereas in NSDL the first two characters are letters which are in accordance with the country that you are from (IN12345678912345), then 6 unique digits for Broker and next 8 digits are client ID.

CDSL = 12345678(DP ID) and 91234567(Client ID).

NSDL = IN123456 (DP ID) and 78912345(Client ID)

If you are a new investor and want to invest in the market, then it is important that you open a Demat account. We at provides the services of opening a demat account. If you are interested in opening a Demat account then you can drop us an email at or whatsapp to Mr. Dinesh Gupta, Co-Founder of IEPFZone at 08010009625 and we will help you out in opening Demat without any hassle.

If the client has Aadhar Card, a Mobile number linked with Aadhar Card, PAN number, and Bank account statement ready then we open Angel Broking Account within 5 minutes and you can start trading within 3-4 hrs.