What is a Demat Account Number?
Demat account or a dematerialized account is essential if you want to carry out trading through electronic modes. If you wish to do share trading, then this is an account that you have to have. Now each account is identified by its unique code, not by the name of the account holder. It is this code which is referred to as a demat account number. The format of a typical demat account number varies, depending on the one who assigns the particular demat account number. All share traders across the world have their particular number with which they carry out the trading.
Who gives a Demat Account Number?
A demat account is generally assigned by a DP or a depository participant. We will come to the role and functions of a DP later in the article. So, there are mainly two DPs who can hand out your demat account number – the CDSL and the NSDL. The CDSL stands for Central Depository Services (India) Ltd. and the NSDL stands for National Securities Depository Limited. Depending upon your needs and services, you will have to select any one of the DPs and register with them. They will provide you with a code with the help of which you will be able to take part in share trading.
The type of code is not the same in case of the CDSL and the NSDL. The CDSL number will have 16 digits whereas the NSDL will have a 14 digits number, beginning with the letters IN. A typical number for a demat account given by the CDSL will be 0123456789101278 while a NSDL demat account will have a number in the format – IN01234567891044.
When do you get a Demat Account Number?
The moment you get a demat account, that is when you will get a demat account number assigned to you. No trading of shares can take place electronically without the code which represents your account and hence once you register and get your application form verified by your DP, you will be assigned a number which will represent your account.
What is Depository Participant?
A depository participant is basically an intermediary. There are people who invest and there are the depositories. It is the job of the depository to intermediate the trading of the shares. Without a depository participant, one’s demat account will not be verified without which no share trading can be done. Any broking firm can act as a DP and each DP will come with its own unique DP ID number.
How is DP ID different from Demat Account Number?
There is nothing similar between a DP ID and a Demat Account Number. The number of your demat account is basically yours which has been allotted to you when you had opened the demat account. However, the DP ID number is an identification number meant for the DP. So, who allots this DP ID number? This number is allotted to the firm or the broking agency by the NSDL or the CDSL with which it registers itself.
When you are opening a demat account, it is important that you have a basic idea about how the thing works. Keep yourself informed and you will be able to make the best of any share trading that you take part in.