What is demat account number?

Electronic trading in India only started in the year 1994 with the establishment of the National Stock Exchange (NSE). Prior to this, trades used to happen using the public outcry method. In this method, brokers used to call out the prices of the shares to be traded and when two brokers found their matching price, the share certificates and consideration would be exchanged. Share certificates, bonds, debentures, securities were all maintained in paper format. Endorsements used to be made on the backside of the certificates showing the details of the new owner.

However, with digitization, one of the things to get an electronic record were paper share certificates. Instead of storing certificates in files, they were replaced by an electronic file or record. The free demat account stores the electronic versions of all investments.

What is demat account?

A demat account is an electronic repository of the investments that a person owns. This can be equity shares, debentures, bonds, mutual fund units, exchange traded funds etc. In case of a purchase, the financial instrument is credited to the demat account. In case of sale, the demat account is debited.

All dematerialized form of shares are stored in the free demat account.

Dematerialization is the process of converting paper or physical units of shares into electronic form. Currently, there are no listed companies that issue physical copies of share certificates. The whole process is online and electronic.

A demat account shows information about investments such as:

• Date of investment
• Number of units purchased
• Whether the investment is partly paid or fully paid
• Purchase price
• Total purchase price
• Current value

What is demat account number:

A demat account number is a unique 16 digit number which is allotted by the depository participant to the demat account holder. Once the depository participant processes the demat account application and the account is opened, the number is allotted. Both the depositories in India issue different numbers. The demat account number is an identifier for the account holder.

It is important to know how to check demat account number both online and offline. Having this information can help the investor in case he is filling up any offline forms or is filling up a delivery instruction slip to transfer shares to the broker or while transferring shares from one demat account to the other.

The two depositories, National Securities Depository Limited (NSDL) and Central Depositoriy Services (India) Limited (CDSL) give numbers to every account that is opened with any depository participant registered with them. CDSL numbers are a 16 digit numeric code. This means all the 16 digits are integers between 0 to 9. On the other hand, NSDL issued numbers with the alphabets IN followed by a string of 14 digits.

You can check the number through the account information in your demat account. In case your SP sends any communication, that will also contain your number. Once you log in to your online demat account, you can check the number in the account information. Once you know how to find demat account number, you can check it whenever you need. It is important to quote the number when you make an application for an IPO.

Maithili Pawar is a finance professor. She has written on share market basics. Through this article, she has provided detailed information on stock market.