NSDL and CDSL Demat Accounts

NSDL and CDSL Demat Accounts.

What is a Demat account?

A Demat Account is an account that allows investors to hold their shares in an electronic form.

Why should you have a Demat Account?

As it is difficult to hold shares in physical forms because it involves a lot of paperwork, long process and risk of fake shares. So, for simple and seamless trading and investing,  Demat account is must to trade in India’s stock exchanges.

Depository Participant (DP).

A depository (in simple terms) is an institution holding a pool of pre-verified shares held in electronic mode that offers efficient settlement of transactions.

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What Is The Difference Between NSDL And CDSL?

There are two Depositories in India – the  National Securities Depository NSDL, promoted by the National Stock Exchange NSE and the Central Depository Services CDSL promoted by BSE

There is unlikely to be much difference between the CDSL and the NSDL, though investors can check with their broker before opening either a demat account.

How to open a Demat Account?

Following are the documents which are required for opening a demat account:
PAN.
Bank statement (last 3 months).
Address Proof.
Income Tax Return.
Two colour photos.
Bank crossed Cheque (If required).
KYC details.
Aadhar Card.

Account-opening fee: Depending on the DP, there may or may not be an opening account fee.

Annual maintenance fee: This is also known as folio maintenance charges, and is generally levied in advance. It is charged on annual or monthly basis.

Transaction fee: The transaction fee is charged for crediting/debiting securities to and from the account on a monthly basis.

Can I transfer shares between NSDL and CDSL? 

Yes, there is an Inter Depository Slip (Inter DIS) which has to be filled and submitted.

Both these institutions have played a tremendous role in helping shareholders move away from physical share certificates to holding shares in the electronic form.

 

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