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What is Client ID in Demat Account?

What is Client ID in Demat Account?

An essential component of a Demat account is the Client ID, which is used to identify the clients that depository participants service. The selected brokerage business, not the depositories, uses a proprietary algorithm to produce this one-of-a-kind eight-digit number. 

A Client ID in Demat account is an investor's or account holder's unique identifying number in the Depository Participant's (DP) records. It is also referred to as a Beneficiary Owner identifying Number (BO ID). This ID acts as a unique identifier for any person or organisation that owns electronic securities.

For several Demat account-related operations, including purchasing or selling stocks, transferring shares, pledging securities for loans, and getting corporate perks like dividends or bonuses, the Client ID is essential. It assists in keeping an exhaustive log of the ownership and transactions of the securities kept in a Demat account.

Overview of what is client ID in Demat account 

We must first examine the structure of a Demat account to comprehend the customer ID in the Demat account. Every Demat account owner is given a unique 16-digit number or numerical code known as a Demat account number. There are two components to the number

  • Depository Participant (DP) ID
  • Client identification

  1. Depository Participant (DP) ID

    Each depository participant, such as a bank or broker, is given a distinct identifier called a DP ID (Depository Participant Identification identification number) issued by the depository institutions. The DP ID is given to financial companies by two depository institutions in India as follows.

    The 16-digit Demat account number's first eight numbers make up the DP ID. It stands for the organisation you decided to set up your account with.

  2. Client Identification

    Your Demat account client ID is made up of the final eight digits of your 16-digit Demat account number. The financial institution or brokerage that establishes your account assigns it. Every shareholder's unique ID is created using an internal formula.
    The distinct client ID enables you to track all of your financial investments in one location. It should be noted that the client ID is provided by the depository participants to identify their clients and is not affected by the depository institutions (NSDL and CDSL).

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Table of Content

  1. Overview of what is client ID in Demat account 
  2. Finding the Client ID and DP ID in a Demat account 
  3. Difference Between a Client ID and a DP ID in a Demat account

Finding the Client ID and DP ID in a Demat account 

To find the Client ID and DP ID in a Demat account, follow these steps:

For a Demat account number like IN00343895765827:

  1. Identify the DP ID: The first eight characters of the Demat account number (IN00343895765827) represent the DP ID. In this case, the DP ID is IN003438.
  2. Locate the Client ID: The last eight characters of the Demat account number are the Client ID. In this example, the Client ID is 95765827.
  3. Determine the Depository Institution: You can tell which depository institution the account is linked to by looking at the format of the DP ID. If the DP ID is alphanumeric (like "IN003438"), it is issued by NSDL. If the DP ID is numeric (like "13400035"), it is issued by CDSL.

So, in this example, the Demat account is linked to NSDL, and the Client ID is 95765827, while the DP ID is IN003438.

Difference Between a Client ID and a DP ID in a Demat account

Elements

DP ID

Client ID

Definition

Special identification number for each Depository Participant (DP).

Special identification code for a person or business with a Demat account.

Purpose

Helps locate the DP associated with the investor's Demat account.

Facilitates identification of the owner of a Demat account and links it to their trading account.

Holder

Assigned to Depository Participants (DPs) who act as intermediaries between investors and the depository.

Assigned to individuals or businesses with a Demat account under a DP.

Function

Identifies the specific DP where the investor holds their Demat account.

Identifies the owner of a Demat account and associates it with their trading activities.

Usage

Primarily used to find the DP associated with a particular investor's Demat account.

Mainly used for tracking transactions when buying or selling securities.

Significance

Critical for communication between the investors and their DP.

Essential for maintaining a clear record of a Demat account holder's transactions.

Example

12345678

ABCD1234

Conclusion 
An individual or business with a Demat account using a Depository Participant (DP) is given a client ID. It is a special identification number. The client ID in Demat account is the last eight digits of the 16-digit number. In contrast, National Securities Depositories Ltd (NSDL) and Central Securities Depositories Ltd (CDSL) in India assign the DP a special identification number known as the DP ID. Client ID makes it easier to locate a Demat account owner and connect the ownership to trading accounts. It also tracks transactions when trading securities through online platforms like a online trading app. So, a client ID is quite vital. Every investor must have complete information about it.

FAQs on What is Client ID in a Demat account?

You need a client ID to buy and sell securities like stocks. You will also require it during share transfers, loans against securities, and for receiving dividends or bonuses.

The bank or broker that opens the Demat account generates the customer ID using an internal formula to produce a distinct ID for each investor.

The client ID is crucial because it makes it possible for an individual or company to conveniently track all of their investments and connect them in one location.

Your client ID can be found by entering into your Demat account online or on the billing statement for your Demat account.

Your customer ID in your Demat account is provided by the banking institution or brokerage that establishes your account, thus you cannot modify it.