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June 14, 2026
The Dispatch

Definition

Depository

A depository is an institution that holds your shares and securities in electronic (demat) form, much like a bank holds your money.

Instead of physical share certificates, your holdings sit electronically in an account with a depository. India has two depositories: NSDL (National Securities Depository Ltd) and CDSL (Central Depository Services Ltd).

You never deal with the depository directly; you open a demat account through a Depository Participant (DP) such as your broker. The depository records all ownership changes when trades settle, making transfers fast and eliminating risks like forgery or loss of certificates.

Related terms

  • Demat AccountA demat account holds your shares and securities in electronic form, eliminating physical certificates and enabling seamless trading and settlement on stock exchanges.
  • NSDLNSDL (National Securities Depository Limited) is India's first depository and the largest by value of assets held, storing securities in electronic form so investors no longer deal in paper certificates.
  • CDSLCDSL (Central Depository Services Limited) is India's second depository and the largest by number of demat accounts, holding investors' securities in electronic form.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.