What is a CDSL Demat Account?

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A demat account is an electronic account that’s used to safely and securely store digitised securities such as equity shares, debentures, bonds and mutual fund units, among others. In India, there are two depositories offering demat accounts – Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL). 

A demat account that you open with the Central Depository Services Limited is termed a CDSL demat account. With this account, you can hold the securities purchased via the primary market – Initial Public Offerings (IPOs) and New Fund Offers (NFOs) or via the secondary market – stock exchanges. 

Every individual CDSL demat account has a unique 16-digit number assigned to it for identification purposes. You can also use this number to log into your demat account via the CDSL EASIEST (Electronic Access to Securities Information `and Execution of Secured Transactions) portal. 

Additional Read: Income Tax Implications on Demat Account

Despite there being two depositories, CDSL demat accounts far out number NSDL demat accounts. Want to know more about the CDSL demat account and its features? Continue reading to find out. But before you learn what a CDSL demat account is, you should first try to understand the concept of a depository and its role in the Indian financial markets. 

What is a Depository?

A depository is an entity that offers demat accounts to investors. Investors can use the demat accounts of depositories to electronically store a wide range of securities, safely and securely. The depositories are designed to be a bridge between the investors and the companies issuing the securities. 

Functions of a Depository

A depository has several functions and responsibilities. Here’s a quick overview of some of the key functions of the entity. 

  • Opening and maintenance of demat accounts
  • Conversion of physical securities into electronic securities (dematerialisation)
  • Conversion of electronic securities back into physical securities (rematerialisation)
  • Electronic transfers of securities 
  • Settlement of trades executed via the stock exchange 
  • Distribution of non-cash dividends like bonus shares 

When was CDSL Established?

As you’ve already learnt, CDSL is the acronym for Central Depository Services Limited. It is one of the two active depositories in India. Although CDSL was incorporated in the year 1999 and is the second depository to have been established, it currently has the most active demat accounts in the country as of May 31, 2023. 

Features and Benefits of CDSL Demat Account


CDSL converts physical securities into electronic form, eliminating the need for physical certificates and reducing risks like loss, theft, and forgery. Investors can securely hold securities in a Demat account with CDSL.

Account Types

CDSL offers various accounts for individual and corporate investors, including joint, partnership, and trust accounts, to cater to diverse needs.


CDSL ensures the security of investors' electronic holdings with measures like encryption, firewalls, and intrusion detection systems, protecting assets and preventing unauthorized access.

Ease of Transactions

CDSL enables easy transfer of securities between Demat accounts, simplifying transactions and reducing paperwork and processing time.

Corporate Actions

CDSL handles dividends, bonus issues, and rights offerings for investors, ensuring timely and efficient distribution of benefits and entitlements.

Quick and Easy Access to Your Investments

One of the many crucial features of a CDSL demat account is that it can give you instant access to all of your securities anytime and from anywhere in the world. All you need to do is use the EASIEST portal of the depository to log into your account. Once you’re logged in, you can view all of your investments in one place and get your CDSL demat account details.


With this, you should now be aware of what a CDSL demat account is. Now, before you go ahead and initiate the account opening process, make sure to compare the various fees and charges levied by the depository participants and choose the most cost-effective one. However, you should also keep in mind that reputation and experience are also major factors that you need to consider before choosing a DP. 

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

What is the rule for CDSL Demat accounts holders?

Answer Field

According to the SEBI guidelines, you need to link the PAN card with the account. You can maintain the account without any minimum amount. There are annual charges that you need to pay alongside a certain percentage of the trading as brokerage fees.

How does CDSL work?

Answer Field

CDSL, or the Central Depository Services Limited, is a securities depository in India that facilitates the holding of securities such as stocks, bonds, and mutual funds in electronic form. Here's how it works:

  1. Account Opening: To begin using CDSL services, an investor needs to open a demat account with a depository participant (DP). A DP could be a bank, financial institution, or brokerage firm registered with CDSL.

  2. Dematerialization: Once the demat account is opened, investors can convert their physical share certificates into electronic form through a process called dematerialization. This eliminates the need for physical certificates and makes transactions more efficient and secure.

  3. Securities Depository: CDSL acts as a central securities depository where the electronic records of securities holdings are maintained. It keeps track of ownership, facilitates transfers, and ensures the integrity of transactions.

  4. Transaction Processing: When an investor buys or sells securities, the transaction is executed through the DP. CDSL facilitates the transfer of securities from the seller's demat account to the buyer's account.

  5. Settlement: CDSL ensures the settlement of trades by transferring securities and funds between the relevant demat accounts. Settlement can occur on a T+2 (trade date plus two days) basis in India, where securities and funds are exchanged two business days after the trade date.

  6. Corporate Actions: CDSL facilitates corporate actions such as dividends, bonuses, and rights issues by crediting the relevant securities or funds to the demat accounts of investors.

  7. Investor Services: CDSL provides various investor services such as account statements, transaction alerts, and electronic voting for corporate actions. This helps investors manage their holdings and participate in corporate governance.

Overall, CDSL plays a crucial role in modernizing the Indian securities market by enabling electronic trading and settlement, reducing paperwork, and enhancing transparency and efficiency.

Can a single individual have multiple CDSL Demat Accounts, and if so, are there any restrictions or implications?

Answer Field

Yes, individuals can have multiple CDSL Demat accounts with different brokers, but must comply with KYC for each account.

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