What is DP in demat account?

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Short Answer

DP means Depository Participant and they act as go-betweens for the depository and the traders. It is the first 8 digits of the Demat account number. For more details, you can read through the expanded version.

Detailed Answer

What is a Demat account?

  • Demat account is the short of dematerialised account.
  • A Demat Account functions similarly to a bank account for your electronic share certificates and other assets.
  • By opening a Demat you can hold bonds, mutual funds, government securities, shares, etc.
  • It is a completely online platform, and no paperwork is involved.
  • It helps the users to trade easily in that specific platform.
  • Demat services are provided by two depositories in India: NSDL and CDSL.
  • There are a lot of perks for having a Demat account such as: settlements will be smooth, help you to gain monetization and liquidity, and most importantly it will be safe and secure.

What is DP?

  • It expands to Depository participant.
  • They are the depository's agents, such as NSDL or CDSL.
  • When you open a Demat account, you will be given a unique Demat account number, and a 16-digit number is assigned to you. Therefore, DP ID is the first eight characters, and your Client ID is the last eight digits.
  • You can invest and trade in the capital sector using this one-of-a-kind code.
  • A DP is also known as an Agent of the Depository in some cases.
  • The provisions of the Depositories Act, 1996 control and monitor the connection between the DP and the depository.
  • Brokerage firms, financial companies, and banks are the most common Depository Members, acting as a link between traders and stock markets.
  • The Depository ID (DP ID) is the number assigned to the depository participant member, i.e., the person that manages your Demat account.
  • A depository investor provides a variety of services, including stock commitment and unpledged, investor relations management, and so on.
  • The depository participant credits or debits the Demat account if a buy or sale transaction occurs.
  • Some of the examples of depository participants are: Upstox, Zerodha, ICICI direct, Angel broking, etc.
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Categories: Demat
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