Demat account: How to choose the right depository participant? Here are the important factors to consider

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demat account. This account serves as your gateway to stock investing and trading in other securities such as derivatives, bonds, commodities, and mutual funds. The stock market has transitioned entirely from physical share trading to a virtual trading system.

Now, holding shares in electronic format necessitates a dematerialised (demat) account. To open a demat account, you need to first choose a depository participant (DP). However, it's important to note that all depository participants are required to register with the depository, an organisation responsible for securely holding investors' securities such as shares, debentures, bonds, government securities, and mutual fund units in electronic form.

This process is facilitated through a demat account. In India, demat account services are primarily provided by two depository bodies known as NSDL and CDSL. These services are further facilitated by numerous “depository participants," such as banks, which act as intermediaries.

According to the data from market regulator Securities and Exchange Board of India (SEBI), there are as many as 277 depository participants registered with NSDL as of March 05, 2024. In addition, there are around 612 depository participants registered with the CDSL. Also Read: Can investors hold multiple demat accounts in India? MintGenie answers CDSL is a publicly traded company, with its shares valued at ₹1,836 apiece at today's closing.