Demat Account vs Statement of Accounts

For anyone investing in shares, bonds, mutual funds, or other securities in India, understanding the different terms used in account management is essential. Two such terms that are often confused are “Demat account” and “statement of accounts”.

While both are related to your investments, they serve different purposes. A Demat account is a facility that stores your securities in an electronic format, whereas a statement of accounts is a document or record that summarises your transactions and holdings. Knowing how these differ can help you keep track of your portfolio and manage your investments efficiently.

This article explains what each of these terms means, their key differences, and how they work together in the investment process.

A Demat account (short for “dematerialised account”) is an electronic account used to hold shares and other securities in digital form. It is similar to a bank account, except that instead of money, it stores investments like:

• Equity shares
  

• Bonds
  

• Exchange-Traded Funds (ETFs)
  

• Government securities
  

• Mutual fund units
  

The account is maintained by a depository participant (DP), who acts as an intermediary between you and the depositories — National Securities Depository Limited (NSDL) or Central Depository Services (India) Limited (CDSL).

• Electronic storage: Eliminates the need for physical share certificates.
  

• Secure and accessible: Protects against loss, theft, or damage of paper certificates.
  

• Ease of transfer: Securities can be bought, sold, and transferred quickly.
  

• Consolidation: All types of securities can be held in a single account.

A statement of accounts is a record that shows the details of transactions and holdings linked to your Demat account. It is typically generated periodically — monthly, quarterly, or annually — or on demand through your broker or DP’s online portal.

It includes details such as:

• Securities held (type, quantity, and ISIN number)
  

• Buy and sell transactions during the period
  

• Corporate actions like bonus issues, splits, and dividends credited in the form of shares
  

• Charges and fees debited to the account
  

A statement of accounts acts like a passbook for your investments, helping you monitor your portfolio and reconcile your records with the broker’s or DP’s records.

Although related, a Demat account and a statement of accounts are not the same. The table below summarises the major differences:

A Demat account is the container that stores your securities, while a statement of accounts is the report that tells you what is inside that container and what changes have taken place.

When you buy shares:

• The securities are credited to your Demat account.
  

• The statement of accounts records the purchase and shows the updated holdings.
  

When you sell shares:

• The securities are debited from your Demat account.
  

• The statement reflects the sale, along with the date and transaction details.

Here’s how a Demat account adds value to your investment journey:

Secure Holding of Investments

The Demat account replaces the need for physical certificates, which can be lost, stolen, or damaged. It ensures your holdings remain safe and are easily transferable.

Simplified Transactions

Buying or selling securities becomes faster and more efficient, as transfers happen electronically through the depository system.

Consolidation of Multiple Investments

A single Demat account can hold various securities, making portfolio management easier for the investor.

Here’s why your statement of accounts is essential for accurate records, informed decisions, and smooth dispute resolution:

Transparency and Record Keeping

The statement of accounts helps you confirm that all your transactions are correctly executed and recorded.

Portfolio Monitoring

By reviewing your statement regularly, you can track performance and make informed decisions about your investments.

Dispute Resolution

In case of discrepancies between your transactions and holdings, the statement serves as an official record to resolve issues with your broker or DP.

Before you rely solely on your Demat account or its statements, it’s important to clear up a few common mix-ups.

Misconception 1 - “My statement of accounts is my Demat account”

A statement is only a report derived from your Demat account. Without the account itself, the statement wouldn’t exist.

Misconception 2 - “If I have a Demat account, I don’t need statements”

Even with a Demat account, checking your statements regularly is essential to ensure all records are accurate and up to date.

You can obtain your statement in the following ways:

• Online Portal: Most brokers and DPs offer secure logins to download or view statements instantly.
  

• Email: Many DPs send periodic statements directly to your registered email ID.
  

• Physical Copy: You can request a printed statement, though most processes today are digital

Following a few simple habits can help you stay on top of your investments and avoid unpleasant surprises.

Keep Your Contact Details Updated

Ensure your email ID and mobile number are correct with your DP to receive timely updates and alerts.

Review Statements Regularly

Check your holdings and recent transactions at least once a month to ensure everything matches your expectations.

Maintain Records

Keep copies of your statements, especially after major transactions, for tax and compliance purposes.

Report Discrepancies Promptly

If you notice any errors or unauthorised activity, inform your broker or DP immediately.

A Demat account and a statement of accounts are both essential in managing investments, but they are not the same thing. The account is where your securities are stored, while the statement is a record of activity within that account. Understanding the difference helps you better monitor your portfolio, maintain accurate records, and ensure the safety of your investments.

By regularly reviewing your statements and keeping your Demat account in good order, you can stay on top of your investments and make well-informed decisions.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.