Depository Services an Demat Account

Question

What do you mean by the terms Depository Services as well as Demat Account?

Answer 1

Depository Services

‘Depository’ is an institution / organization which holds securities in electronic form where trading is done (e.g. shares, debentures, bonds, mutual funds etc.). The term ‘Depository Services’ is the facilities given by a Depository. At present there are only two depositories in India they are namely National Securities Depository Ltd. (NSDL) and Central Depository Services Ltd. (CDSL).

Services provided by Depository

Dematerialisation (usually known as demat) is converting physical certificates to electronic form  Dematerialisation, known as remat, is reverse of demat, i.e. receiving corporal credentials from the electronic securities Transfer of sanctuaries, alteration of advantageous proprietorship Reimbursement of trades done on exchange connected to the Depository

Demat Account

Demat account is the abbreviation of 'Dematerialized Account'. Demat (Dematerialized) account states to an account in which an Indian citizen requisite open with the depository applicant (banks, stockbrokers) to trade in listed securities in electronic form wherein one can hold shares of various companies in the Dematerialized {electronic} form.