• The demat account holds stocks and securities in electronic form. It eliminates the risks associated with physically holding stocks and allows you to trade in a hassle-free way. A demat account can hold a variety of investments such as stocks, bonds, debt securities, government bonds, exchange-traded funds (ETFs), mutual funds, etc.

• A demat account is similar to a bank account. For example, if you buy stock for a particular company, that stock will be credited to your demat account. Conversely, if you sell stock, it will be deducted from your account accordingly.

• Demat accounts in India are managed by NSDL (National Securities Depository Limited) and CDSL (Central Depositories Services Limited). A stock brokerage company registered with one of the account holders is known as the Deposit Participant (DP).

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