What is the DP ID And CLIENT ID?
Now we are going to discuss apart from the Demat account, what is DP ID, And CLIENT ID. If you are an existing investor, you might be having a Demat account, and you must have seen the DP ID on your statements. and if you are new to share markets, you must have heard that it is hoe necessary to open a Demat account to invest in the share market.
So, this is a common question where most of the beginners ask what my Demat account number is? Where can I find it? Or what is the DP ID is all about? This is a common question that comes to everyone’s mind, what is my Demat account? and why is it essential to have a Demat account?
So, a Demat account is just like having a bank account, so what is a bank account? A bank account keeps your money safe. So, you are supposed to deposit your money into the bank account. So, you have an account in banks like State Bank of India, or you have accounts in some other banks, so the primary purpose of the bank is to keep your money safe.
So, a Demat Account is something like a bank account only. Where you keep is your securities and shares or mutual funds. Demat is just like a bank account, which is used in the share market and used for trading. Where, instead of keeping money, investors hold their stocks. These days nobody keeps a physical copy of a share on their hand. Now everything has become online, so the physical copy of shares has become a soft copy and is being saved in the Demat account for safe access.
It is not just sharing that is kept in the Demat account. It can be any security products like Mutual funds, debt funds, or any other bonds that can be held in the Demat account. Now the main question is who opens the Demat account for you? We all know how to open a regular bank account, but what about a Demat account? Or who maintains your Demat account and takes care of your deposits?
In India, there are two central depositories. Means who take care of your securities and shares. The organization is called as depositories. So, in India, we have two depositories CDSL & NSDL. They are the one who helps in opening a Demat account for you and keep your shares and securities in a dematerialized format.
So, for opening a Demat account, you never go to this CDSL or NSDL directly. We do not ask them even to open an account. So how do we do? We open a Demat account mostly using brokers. Like if you have an account with brokerage Agencies or brokering organizations. In India, we have a few online Discount brokerage firms like ZERODHA, UPSTOX, or ShareKhan.
So, once you visit their portal step by step, they will guide you and will help you to open a Demat account. So, these people who are helping us to invest in the share market like brokers, are known as depository participants. and the Depository Participant is nothing but the participants or partners of the depositories like NSDL and CDSL. and depository partners or the brokers help people are the customers to open Demat accounts with the depositories.
What is the DP ID? The DP ID is the unique ID of the Depository Participant ID. By which the NSDL & CDSL identify the investors. Now, if you are opening a Demat account with Share khan, then your Demat account number will look like the first eight-digit is your DP ID of Serkan, plus another is your client number and another digit unique number which will be your Demat account number.
If you are opening through Zerodha or UPSTOX, then you will have a different Demat account number where eight-digit DP ID of Zerodha or UPSTOX plus, another eight digits is your client number as our Demat account number.
Now, we know that it is a 16-digit number. If it is going to be an NSDL, then your Demat account number is going to be starting with IN plus, another 14 digit number or If you are opening your Demat with CSDL, then your account number will be a 16 digit number. The Demat account number is going to be a 16-digit number, and the DP ID is nothing but the identification number for your broker through whom you opened the Demat account.
So, DP ID and your Client id are especially essential if you are applying for IPO through your net-banking. And if you have an account with Zerodha & UPSTOX then it is not necessary to provide these two ID, every time, but again as we all know how important for us to open an account in online discount brokerage firm because they help us top to bottom every way of our IPO journey, so, we have to provide them with our DP ID & Client ID while opening an account with an online discount broker.
Opening a brokerage account is a lengthy process as they ask for much information; they also ask for your Demat account number. So, I would say Demat account and its number is very crucial throughout every step of trading. So, if you use your mobile phone for applying or your computer or you apply through physically through offline mode, you will be needed to open the Demat account and required to either remember or to carry its number whatever you do. It is your testimony number as a trader. Just like Aadhaar or Pan, it is as essential as they are.
