What are Advantages and Disadvantages of NSDL Demat Account

The NSDL Deposit Account is a deposit account under the management of National Securities Depository Limited. The shares shall be attributed to an investor's NSDL Demat account in T+2 days if the investor places a delivery purchase order. Similarly, in T+2 days, when an investor sells shares, it is debited from his NSDL account. NSDL Demat account opening is provided in India by DP-cum-brokers.

It takes three steps to open a NSDL Demat account. Your Demat account will be opened with NSDL once your details have been verified. To understand the advantages and disadvantages of the NSDL demat account and its limitations, go through the guide below.

The essence of an NSDL Demat Account

When you open a demat account, it is either with  NSDL or CDSL as the depository. An NSDL demat account is one where the depository is NSDL. Now, NSDL's full form is National Securities Depository Limited (NSDL). That is also the NSDL, meaning that it is a central government-authorized and SEBI-regulated depository. You can get the NSDL demat account login through your authorized trading account with a broker linked to the demat account.

The NSDL account opening process is simple and requires the basic KYC to be done by you. Or, of course, there will be the DP charges and the NSDL charges on every transaction. The NSDL demat charges are normally on every debit to the NSDL demat account. In this section, we will look at in detail the NSDL full form in the share market as well as the nuances of what is an NSDL demat account. Remember, there are fixed NSDL charges for selling shares and debiting your demat account. 

What is NSDL?

NSDL, or the National Securities Depository Limited, is India’s pioneering and, therefore, also the oldest depository institution. It was established in 1996. NSDL pioneered electronic custody in India and was the electronics securities depository that holds securities like bond shares in electronic format. 

NSDL made it possible to hold securities electronically. Thanks to that change, it became a breeze to manage these things in a hassle-free manner. From a structural perspective, you can understand the role of NSDL as similar to that of a bank. To use an analogy, while the banks hold cash belonging to the depositors in safe custody, the NSDL holds equities, mutual funds, ETFs, bonds, government bonds, and other financial assets as electronic securities.

Advantages & Disadvantages of NSDL Demat Account

The following table has the drawbacks and advantages of an NSDL demat account.