Demat Account: CDSL or NSDL? How to decide between the two? Here's a 10-point guide
Demat accounts store all your financial securities electronically. These accounts are managed by depositories, which securely hold shares and other financial securities on behalf of investors in a dematerialised format. When you buy shares, they are credited to your demat account; when you sell them, your demat account is debited.
Investors need to open a demat account with a Depository Participant (DP), which acts as a bridge between an investor and a depository. There are two major share depositories in India: NSDL (National Securities Depositories Limited) and CDSL (Central Depositories Services Limited). Both are registered with the government and incorporated by market regulator SEBI.
They hold the shares of millions of stock market investors in electronic form, ensuring secure and efficient management of financial assets. NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) play significant roles in the Indian financial markets. Established: NSDL was established in 1996 and is the oldest and largest depository in India.
CDSL was established in 1999 and is the second-largest depository in India. Both are headquartered in Mumbai. Pioneering Role: NSDL was the first depository to provide online trading services in India, which has greatly shaped the modern Indian financial market.
CDSL also provides online trading services. Regulation: Both NSDL and CDSL are regulated by the Securities and Exchange Board of India (SEBI). Financial Securities: The depositories are responsible for the safekeeping of various financial securities like stocks, bonds, debentures, commercial papers, and mutual funds.
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