A Demat account is also known as Dematerialized account. In other words, converting or dematerializing your physical shares in the electronic format is known as holding a Demat Account. Demat account is used to hold the shares and securities of publicly traded companies in an electronic form. With a Demat account, you can hold a wide variety of investments such as bonds, equity shares, government securities, mutual funds, and exchange traded funds. Similar to a bank account, a Demat account is either credited or debited each time you buy or sell shares of a company.
All of the Demat accounts in India are maintained by two organizations, namely National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).