scorecardresearchWhat is the difference between NSDL and CDSL?

What is the difference between NSDL and CDSL?

Updated: 17 Mar 2022, 10:23 PM IST

NSDL and CDSL are the two registered depositories that are registered with the Government of India. Both of them are administrative bodies that hold financial instruments, securities, stocks of investment in an electronic form. Let us learn about the same in further depth in the following article.

We explain here what is the difference between NSDL and CDSL

We explain here what is the difference between NSDL and CDSL

When you place a request to a depository participant to open a demat account, you can place it for either Central Depository Securities Limited (CDSL) or National Securities Depository Limited (NSDL). 

Both these depositories function like a bank for the investors. They are responsible for holding assets like financial instruments, shares, bonds and others instead of holding money like other bank accounts.

What is the difference between NSDL and CDSL?

Although both NSDL and CDSL perform the same functions and are vastly similar. However, there are a few differences between the two.

The major difference between the two is, NSDL is responsible for maintaining the electronic copies of bonds, stocks, ETFs, etc. that are traded on the National Stock Exchange (NSE). 

On the other hand, CDSL is responsible for maintaining the electronic copies of bonds, ETFs, stocks, etc. that are traded on the Bombay Stock Exchange (BSE).

They are different in their age as well, NSDL was the first electronic depository of India that was registered in 1996. On the other hand, CDSL was the second depository of India that was registered in 1999.

The NSE and financial institutions like IDBI and Unit Trusts of India promote NSDL. On the other hand, the BSE and State Bank of India along with other banks like HDFC Bank, Bank of Baroda promote CDSL.

Which of the two is better?

As mentioned in the previous section, there is no major difference between the two apart from the exchange they are affiliated to. Both the depositories are registered by the Government of India and are regulated by the Securities and Exchange Board of India. Which of the two is better is entirely dependent on the exchange that you choose to trade.

Generally, the investor is not given a choice nor has a say in choosing the depository. The DP (Depository Participant) chooses the depository in accordance with accessibility and economic convenience to open the demat account. The depository participant picks between NSDL and CDSL and then credit or debit securities from either of the depositories on behalf of the customer.

How to open an NSDL demat account?

In order to open an NSDL demat account, you are required to approach a depository participant that is registered with National Securities Depository Limited. You can view the list of all the depository participants and stockbrokers that are registered with NSDL. Below listed are the steps to open an NSDL demat account.

Step 1: Contact a depository participant that is registered with NSDL

Step 2: Post this, you are supposed to complete the Know Your Customer (KYC) details and requirements. Additionally, with your application form submit a copy of your address proof, bank details and PAN card to your depository participant.

Step 3: Your documents will then be submitted for approval and verification.

Step 4: Upon successful verification, your account will be opened by the DP on your behalf with NSDL

Step 5: You will be then provided with all the details related to your NSDL demat account. This will include DP ID, copy of rights and obligations amongst others. You will also receive the login credentials which you can use to access your NSDL demat account.

When your NSDL demat account gets operational you are eligible to trade securities electronically on the stock market. The most important thing to note is your user ID and password. 

Make sure that you do not share it with anyone in order to protect your account against fraud and other illegal activities. Your passwords should always be like your toothbrush, nobody but you can use it.

How to identify CDSL account?

When you approach a depository participant to open your demat account, the DP will open it with either NSDL or CDSL. The question is how will you identify your demat account? The easiest way to identify your account is by identifying your demat account number.

A CDSL demat account is identified by a combination of 16-digit numbers. Whereas, an NSDL demat account number is a combination of alphabets and numbers. The NSDL demat account number will always begin with ‘IN’ and then it is followed by a combination of 14-digit numbers.

What is CDSL easi and how to register for it?

CDSL easi stands for electronic access to securities information and was introduced by CDSL to ease the process for the customers to manage the demat account at any time from anywhere in the world. 

This is the internet based facility that is offered by CDSL enables the registered customers to keep a track of their holdings and their transactions directly through the website.

Below listed are the steps for registering yourself on the CDSL easi platform. The process is quite simple and user friendly.

  1. Begin by visiting the CDSL website and click on the ‘login’ option at the top right corner of the page.
  2. A pop-up box will appear, the first option ‘New System Myeasi (BO/CM/DP/Issuer/DDP)’ needs to be selected.
  3. After you click the login button, proceed to ‘To Register for Easi! Click Here.’
  4. Fill in all the essential details that have been asked including your demat account number and the password.
  5. Once you will submit all the details the registration process will be completed. You will then be able to login to the portal with the credentials.

The easi portal comes free of cost and there are no additional charges implied to your demat account. This portal can be used for a variety of tasks. A few of them have been listed below.

  1. It enables you to track and print all the details related to holdings and transactions made in the last seven days.
  2. You can check up on all of your demat accounts with a common login ID.
  3. You can print the details of the valuation of the holding in your demat account which depends on the closing price of the previous day on the Bombay Stock Exchange.
  4. With respect to the securities and shares that you hold you can check all the corporate announcements by logging in to your account. You are allowed to add 25 International Securities Identification Numbers of the securities you are not a holder of. This way you can also monitor the corporate announcements that are related to these securities.

What is meant by CDSL EASIEST?

Electronic Access to Securities Information and Execution of Secured Transaction is abbreviated to EASIEST. At times, the shares that you make transactions for might not be transferred to your account and are kept in the depository participant’s pool account. In simple words, you do not own the shares that you paid for and purchased. CDSL EASIEST comes in use over here as it enables the account holder to monitor the details and helps you determine if the trades reflect your ownership or not. EASIEST is also very useful when you transfer shares from one account to another.

How to register for CDSL EASIEST?

Registering for CDSL EASIEST is similar to registering for CDSL easi. Make sure you have all the details like DP ID and BO ID in hand while registering.

  1. Visit CDSL website and select EASIEST from the ‘Register Online’ tab on homepage
  2. Enter all the required details like DP ID and BO ID. Thereafter you will be required to enter your phone number and email address.
  3. After you enter your registered phone number, you will receive a One Time Password (OTP). Enter this OTP to verify your number.
  4. You will be then asked to select the type of account.

Account of choice transfer: you can transfer securities to any other demat account using this option. Make sure that you get your transaction verified with a digital signature.

Trusted account transfers: you can transfer your securities to any other four demat accounts that you trust and are registered with CDSL.

5. If you select the trusted account transfers option then you will be required to submit the BO number of the accounts that you will be transferring the securities to.

6. Up next, you need to fill in the details of your other CDSL accounts registered with brokers under the ‘grouping’ option. However, if you do not have any you can simply skip this option.

7. Submit all the details in order to initiate the registration process.

8. After you submit all your details and they are verified, your CDSL EASIEST account will be activated in 24 to 48 hours.

CDSL and NSDL are the two depositories that are registered with the Government of India. They hold various assets just like bank accounts hold money. The major difference between CDSL and NSDL is that of the exchange they trade in. NSDL trades in the National Stock Exchange and CDSL trades in the Bombay Stock Exchange. 

In order to register and open a demat account for either of the two you need to approach the depository participant or broker that is registered with the respective depository.

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First Published: 10 Mar 2022, 09:14 AM IST