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A Depository is an institution that holds financial securities in a De-Materialized form and facilitates their trade on various stock exchanges and platforms.

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A Depository is an institution that holds financial securities like shares, debentures, and mutual funds in electronic form (De-Materialized form). It also facilitates the trade of these securities on various stock exchanges.

In India, there are two government-authorized depositories; CDSL and NSDL.

Depository offers Demat Account, an online account to keep stocks, mutual funds, and bonds in electronic form. A demat account works like a bank account but instead of money, it holds shares. Demat account facilitate the online trading of stocks.

Depository offers its services through intermediaries called Depository Participants (DP). In most cases, stock brokers are DP.

Depository in India

The Government has authorized two depositories to operate in India. The customer has to choose one of these two depositories to open a demat account.

Depository Participant (DP)

A depository offers its services through authorized agents only. These agents are called Depository Participant (DP). Usually, stock brokers have DP membership.

A DP has to be a registered member of the Indian regulatory body for the financial securities market, Securities and Exchange Board of India (SEBI). Every DP must register with either NSDL or CDSL to provide demat account-related services to their clients.

A Depository interacts with investors only through Depository Participants.

Depository Services

The Services provided by a Depository are as below;

  • Demat Account
  • Dematerialisation of physical certificates into electronic securities.
  • Rematerialisation of electronic securities to physical certificates.
  • Settlement of trades through market transfers.
  • Inter-depository transfer of securities.
  • Distribution of non-cash corporate actions like bonus shares, rights issue, merger, split, etc.

Depository Charges

Depository charge a fee for all transactions done by the customers in their demat account held with the depository. These charges are collected by the depository participant (in most cases the broker who is also a DP) whom with the customer has the account.

The depository has a fixed fee structure for all the customers. But DP's charge higher fees to customers as they include their own charges on top of it.

Depository Charges Example

  • Demat Account Opening Fee
  • Demat Annual Maintenance Charges (AMC)
  • Demat Debit Transaction Charges (Share withdrawn on sell)
  • Pledge Charges

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Frequently Asked Questions

  1. 1. What is the role of a Depository?

    Depositories are institutions that hold investors' securities (likeshares, debentures, and mutual funds) in an electronic form in a Demat account.

    The role of the Depository is:

    1. To offer Demat accounts to investors.
    2. Hold, and maintain a record of securities in Demat accounts for investors.
    3. Make online trading fast & secure.
    4. Settlement of trades carried out on the exchange.
    5. To reduce the paperwork involved in the transfer of financial securities.


  2. 2. Which depository is used by Zerodha?

    Zerodha is a Depository Participant (DP) of CDSL (Central Depository Services Limited). It acts as an intermediary (or agent) between a CDSL and the customers.

    Zerodha DP Details:

    • Zerodha DP name: CDSL
    • Zerodha DP ID: 12081600
    • Zerodha Sample Demat Account Number: 1208160099999999 (combination of DP ID and client ID)


  3. 3. What are Depository Charges?

    The depository charges (demat account charges or DP charges) are collected by depository participants (DPs) for offering demat account-related services to customers.

    In most cases, the stock broker whom the customer has a trading account also is a member of a depository. They charge the customer for all demat account-related transactions.

    Here is the list of demat account transaction charges:

    • Account Opening Charges
    • Account Maintenance Charges (Demat AMC)
    • Debit Transaction Charges (Sale Transactions)
    • Off-Market Debit Transaction Charges
    • Pledge Creation Fees
    • Pledge Invocation Fees
    • Dematerialisation Charges
    • Rematerialisation Charges
    • Modification in Address, E-mail, Mobile and Bank Updation Fee
    • Delivery Instruction Slip Charges
    • Account Statement Charges

    To know more about these charges please visit the Demat Account Fees & Charges page.


  4. 4. Is depository same as custodian?

    A comparison between a depository and a custodian can be seen in the table below;

    Depository Vs Custodian



    A Depository is an institution that:

    • Holds financial securities (like shares, debentures, and mutual funds) in an electronic form,
    • Enables clearing and settlements for these securities, and
    • Facilitates transfers of these securities

    A Custodian is a bank or a financial institution that only holds financial securities (like stocks, bonds, gold) for safekeeping.

    It has custody and legal ownership of the financial securities it holds.

    It does not have legal ownership of the securities it holds.

    Custody is one of the functions of a Depository.

    Custody is the sole function of a Custodian.

    Every Depository is a Custodian.

    Every Custodian is not a Depository.


  5. 5. What is depository detail in IPO application?

    While applying for an IPO, you have to fill up the following depository details;

    • Depository- NSDL and CDSL are the two depositories operating in India. You have to choose the depository where you have your demat account.
    • DP Name- It stands for Depository Participant (DP) name. In most cases, it is the name of your stock broker.
    • DP ID- The Depository Participant ID (DP ID) of your stock broker. It is an 8 digit numeric (CDSL) or alpha-numeric (NCDL) id.
    • Client ID - A unique ID assigned to the client. It is an 8-digit Demat account number.
    • Beneficiary DP account number - A Beneficiary DP account number is applicable only for CDSL. It is a 16-digit unique Demat account number. It is a combination of 8 digit DP id and 8 digit client id.

    Example: If you have an account with Ventura Securities Ltd. following would be your depository details for an IPO application;

    Depository Details Example



    DP Name

    Ventura Securities Ltd.

    DP ID


    Client ID (Sample)


    Beneficiary DP account number



  6. 6. How to know your depository?

    A customer can find with which depository (CDSL or NSDL) he has an account in the following ways:

    • Check your demat account-related documents i.e. demat statement, dp slips etc.
    • Contact your broker whom with you have your demat account.
    • If 16 digits demat account number starts with IN, your Demat account is said to be registered with the NSDL depository.
    • If 16 digits demat account number's first 8 digits are numeric, your Demat account is said to be registered with the CDSL depository


    The DP ID of Ventura Securities is IN303116. The 8-digit alphanumeric DP ID indicates that Ventura Securities is a member of the NSDL depository.

    The DP ID of Zerodha is 12081600. The 8 digits numeric DP ID indicates that Zerodha is a member of the CDSL depository.



    Every broker (or Depository Participant DP) in India is registered with one of the two depositories (NSDL or CDSL). To know your depository, you can contact your stock broker.

    Brokers like Zerodha only have CDSL membership. This means all Zerodha customers have the demat account with CDSL only.

    Other brokers like Sharekhan have both NSDL and CDSL membership. The customer has to choose one of them while opening an account. In this case, you will have to check with the broker or check your demat account-related documents to find which depository you have an account with.


  7. 7. What are NSDL and CDSL charges?

    NSDL and CDSL are two authorised depositors in India offering demat accounts to stock market investors. These depositories charge fees for the services they offer. These fees are collected by their authorised partner (depository participant) which is usually the stock broker whom with you have your demat and trading account.

    While the NSDL and CDSL charges are the same for all the customers, different brokers charge different demat charges to the customer. This is because they add their own fee on top of the depository charges.

    You could visit your stock broker's website to check the depository charges applicable to you.


  8. 8. How is a depository similar to a bank?

    A Depository compares to a bank in the following ways;

    Bank Vs Depository



    Holds money in a bank account

    Holds financial securities like shares, debentures, mutual funds in a demat account

    Enables fund transfers between bank accounts as requested by the account holder

    Enables securities transfers between demat accounts as requested by the demat account holders

    Eliminates the need to physically handle money

    Eliminates the need to physically handle security certificates



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