How to use a Demat account

Learn how to use a Demat account effectively.
OPEN ACCOUNT
How to use a Demat account
OPEN ACCOUNT
3 mins
17-July-2025

A Demat account, short for "Dematerialised account," is an electronic account that holds securities such as stocks, bonds, debentures, and other financial instruments in digital format. This account eliminates the need for physical share certificates and facilitates easy and secure trading and investment in the stock market.

How to use a Demat account?

To use a Demat account in the Indian securities market, you need to follow these steps:

  1. Open a Demat account: You can open a Demat account with a depository participant (DP) registered with the Securities and Exchange Board of India (SEBI). You will need to provide your PAN card, Aadhaar card, and other KYC documents. Once your account is approved, you will receive a unique Demat account number (DP ID) and client ID.
  2. Link your Demat account to a trading account: You will need to link your Demat account to a trading account to start trading in the Indian securities market. You can open a trading account with a broker registered with SEBI.
  3. Start trading: Once your Demat and trading accounts are linked, you can start trading in the Indian securities market. You can buy and sell shares, bonds, ETFs, mutual funds, and other securities using your trading account.

Pro tip

Invest in equities, F&O, and upcoming IPOs effortlessly by opening a Demat account online. Enjoy a free subscription for the first year with Bajaj Broking.

demat

In addition, once you place an order to buy or sell shares, a request is sent to the stock exchange. If your order matches with another investor who placed a sell or buy request at a similar price, the order gets executed. It takes T+1 days for the credit or debit of shares in a Demat account after the execution of trade and the confirmation from the exchange, where T is the day of trade. 

Important terms associated with Demat account

  1. Dematerialise:
    Dematerialisation is the process of converting physical share certificates into electronic form. When shares are dematerialised, they are credited to the investor's Demat account, allowing for easy and secure electronic trading and management.
  2. Rematerialise:
    Rematerialisation is the reverse process of dematerialisation. It involves converting electronic securities held in a Demat account back into physical certificates. This process is relatively less common, as electronic holding is the norm in modern securities trading.
  3. Demat Debit and Pledge Instruction (DDPI):
    A Demat Debit and Pledge Instruction (DDPI) is a request made by the Demat account holder to debit securities from their account for various purposes. This can include transferring securities to another account, selling them in the market, or pledging them as collateral for loans.
  4. Nomination Facility:
    The nomination facility in a Demat account allows the account holder to nominate a person who will receive the securities due to certain events or unforeseen circumstances.
  5. Central Depositories:
    Central Depositories are organisations responsible for the central holding and maintenance of electronic securities in dematerialised form. In the Indian context, two central depositories are prominent: the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL). These entities facilitate the electronic transfer and settlement of securities.
  6. Depository Participant:
    A Depository Participant (DP) is a financial institution authorised by a depository (e.g., NSDL or CDSL) to offer Demat account services to investors. DPs act as intermediaries between the depository and the investors, providing a platform for opening and maintaining Demat accounts, as well as facilitating the transfer of securities.

Conclusion

A Demat account has become an integral part of the stock market infrastructure, streamlining and modernising the process of buying, selling, and holding securities. It offers investors a convenient and secure way to participate in the financial markets without the complications associated with physical share certificates.

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Standard Disclaimer

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

Research Disclaimer

Broking services offered by Bajaj Financial Securities Limited (BFSL) | Registered Office: Bajaj Auto Limited Complex , Mumbai –Pune Road Akurdi Pune 411035 | Corporate Office: Bajaj Financial Securities Ltd,1st Floor, Mantri IT Park, Tower B, Unit No 9 & 10, Viman Nagar, Pune, Maharashtra 411014| CIN: U67120PN2010PLC136026| SEBI Registration No.: INZ000218931 | BSE Cash/F&O (Member ID: 6706) | DP registration No : IN-DP-418-2019 | CDSL DP No.: 12088600 | NSDL DP No. IN304300 | AMFI Registration No.: ARN – 163403|

Research Services are offered by Bajaj Financial Securities Limited (BFSL) as Research Analyst under SEBI Regn: INH000010043. Kindly refer to www.bajajfinservsecurities.in for detailed disclaimer and risk factors

This content is for educational purpose only.

Details of Compliance Officer: Ms. Kanti Pal (For Broking/DP/Research)|Email: compliance_sec@bajajfinserv.in/Compliance_dp@bajajfinserv.in |Contact No.: 020-4857 4486 |

Investment in the securities involves risks, investor should consult his own advisors/consultant to determine the merits and risks of investment.

Related Videos