A Demat account (short for Dematerialized account) is an account to hold financial securities (equity or debt) in electronic form. In India, Demat accounts are maintained by two depository organisations, National Securities Depository Limited and Central Depository Services Limited. A depository participant, such as a bank, acts as an intermediary between the investor and the depository.
A demat or dematerialized account holds shares in electronic form. A demat account allows you to buy shares and store them safely. It is similar to a bank account. When you purchase shares, it will be credited to your demat account and similarly when you sell, it will be debited from your account.