Understand the distinctions between CDSL and NSDL, and discover how they impact your investments through a Demat account.
The National Securities Depository Limited (NSDL), was established in 1996. It is one of the two significant depositories in India. Its primary function is to hold securities such as shares, bonds, and debentures in an electronic or dematerialised form.
Founded in 1999, the Central Depository Services Limited’s (CDSL) main function is similar to NSDL. The key difference between them is that CDSL is the depository for the Bombay Stock Exchange (BSE). NSDL is the primary depository for the National Stock Exchange (NSE).
While both are SEBI-regulated depositories and have similar functions, they differ in other ways. These include their formation, services, and format of the Demat account number.
Here is an overview of the differences between CDSL and NSDL.
Categories |
NSDL |
CDSL |
Promoters and Investors |
Promoters include IDBI and NSE. Principal shareholders include various financial institutions, such as the State Bank of India, HDFC Bank, and Standard Chartered Bank |
Promoted by the BSE. Top shareholders include banks such as HDFC Bank, Standard Chartered Bank, and PPFAS Mutual Fund |
Primary Market |
National Stock Exchange |
Bombay Stock Exchange |
Demat Account Format |
NSDL account numbers have 14 numeric digits and begin with ‘IN’ |
CDSL account numbers contain 16 digits |
Quantity of DPs and Demat accounts |
Low |
High |
Note: The fees and charges of CDSL and NSDL depend on the depository participant or stockbroker.
When choosing a depository for your investment needs, consider factors such as:
Services Offered
Look for a depository offering services, such as e-voting, online access to statements, and a mobile app for investors. Since NSDL and CDSL provide similar services, you could choose any of them.
Charges and Fees
Compare the cost of different depositories and choose one that offers the most competitive pricing. Though NSDL and CDSL have similar fees, you can check out the charges levied by depository participants or stockbrokers.
Additional Features
Take into consideration the different facilities offered by the depository. For instance, CDSL provides e-locker facilities to help investors electronically store crucial documents. Similarly, NSDL allows individuals to hypothecate and digitally pledge their securities as collateral for loans or related transactions.
Ultimately, the choice between NSDL and CDSL will depend on your stockbroker or DP. Both depositories offer similar services, technology, and security measures.
Frequently Asked Questions
Are there any specific industries or sectors that CDSL or NSDL specialise in?
No, both CDSL and NSDL are general depositories and do not specialise in any particular industry or sector. They hold financial securities such as shares and bonds in dematerialised form for all types of investors.
How do CDSL and NSDL ensure the safety and confidentiality of investor information?
CDSL and NSDL use advanced technology and security measures such as 128-bit SSL encryption and two-factor authentication to ensure safety and confidentiality. They also conduct routine audits and maintain strict compliance with regulatory guidelines.
Can I transfer securities from one depository to another?
Yes, you can transfer securities from one depository to another through an inter-depository transfer process. This process requires you to submit a transfer request to your existing depository participant, who will initiate the transfer process with the receiving depository.
Are there any additional charges for using value-added services offered by CDSL or NSDL?
Yes, there may be additional charges, depending on the specific service and the depository participant through which the service is accessed. Hence, it is important to check with your DP or stockbroker for information on charges.
Which is better: NSDL or CDSL?
They are both regulated by SEBI and provide similar investing and trading services. However, the primary markets differ, and the charges levied depend on the broker or DP. So, the right option for you depends on your investment needs and the selected DP.
What is the difference between CDSL and NSDL DP ID?
The Depository Participant (DP) ID is nothing but the Demat account number. In the case of NSDL, this is a 14-digit number that starts with ‘IN’. However, it is a 16-digit number for CDSL.
How do I know if I have an account with CDSL or NSDL?
If your account is with NSDL, the Demat account number will begin with the letters ‘IN’ followed by 14 digits. On the other hand, the Demat account with CDSL will have 16 digits.
An example of a demat account with NSDL can be IN10385728204958, whereas that of a demat account with CDSL can be 0384758392058385.
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