Demat account

A demat account is an Indian term for a dematerialized account that holds financial securities (equity or debt) digitally for traded shares in the share market. In India, demat accounts are maintained by two depository organizations: the National Securities Depository Limited and the Central Depository Services Limited.

A depository participant (DP), such as a bank, acts as an intermediary between the investor and the depository. In India, a DP is described as an agent of the depository. The relationship between the DPs and the depository is governed by an agreement made between the two under the Depositories Act.

A security is a tradable financial asset; the term commonly refers to any form of a financial instrument, but its legal definition varies by jurisdiction. Purchases and sales of securities on the demat account are automatically made once transactions are confirmed and completed.