What is a Demat Account?

A Demat account, short for “Dematerialized account,” is used to store shares and securities in digital form. Instead of holding physical share certificates, investors can safely keep their investments electronically through a Demat account.

In India, a Demat account is essential for investing in the stock market. It allows investors to buy, sell, and hold assets such as stocks, mutual funds, ETFs, bonds, and IPOs conveniently online.

When you purchase shares, they are credited to your Demat account, and when you sell them, the shares are debited automatically. It works similarly to a bank account, but instead of money, it stores securities.

Demat accounts are managed by depositories like NSDL and CDSL through registered stockbrokers.