The full form of DP account is Depository Participant account.
A Depository Participant (DP) acts as an intermediary between an investor and a central depository, such as the National Securities Depository Limited (NSDL) or the Central Depository Services Limited (CDSL). When you open a Demat account, you are essentially opening it with one of these depositories, and the DP is the entity that facilitates this process. Think of the DP as the service provider that allows you to hold and manage your securities in electronic form.
Here's a breakdown:
- Depository: A central organization that holds securities (like shares, bonds, etc.) in electronic form. In India, NSDL and CDSL are the two main depositories.
- Participant: An agent of the depository, typically a bank, brokerage firm, or financial institution, that interacts directly with investors.
Therefore, a DP account is the account you hold with a Depository Participant to manage your securities electronically.
