InvestorQ : Is demat account and DP account one and the same thing?
Mahima Roy made post

Is demat account and DP account one and the same thing?

Answer
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Archita Jajjoo answered.
2 years ago


In the stock markets, lots of terms are used very interchangeably. People use broking account and trading account for the same thing. They also use DP account and Demat account in a similar way. Essentially there is no difference. They are one and the same thing.
Demat account is an account where you hold shares and other securities in custody. A demat account is somewhat like a bank account, the only difference being that in a bank account you hold funds and in a demat account, you hold shares and other securities. Dematerialization, on the other hand, is a process. It is the process of converting your physical shares into dematerialized shares and holding it in an electronic form instead of physical certificates. The graphic below puts the relationship in perspective.
What do you infer from this chart above? The two depositories; NSDL and CDSL are the nucleus of the entire effort. They are represented by the depository participant (DP) who could be a banker or a broker. You go and open a Beneficiary Owner (BO) account with the DP, and your shares will be held with one of the two principal depositories; NSDL and CDSL. Once your BO account is opened you can either send your physical shares for dematerialization or you can directly transact in demat mode and demat settlement.