Streamlining Investment Management with Depository Services
by AKASH GUPTA on 25 Apr 2025 07:17:36
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Streamlining Investment Management with Depository Services
Depository services were introduced in 1996 after the establishment of National Security Depository Limited. Earlier, the share certificate was issued to the holder, which was susceptible to loss, forgery, and the risk of bad deliveries. These services proved to be a game changer in the stock market. In this article, we will explain how you can streamline your investment with depository management services.
Benefits of Depository Management Services
The growing rise in depository participants (intermediaries between the investor and the depository, like NSDL and CDSL) has strengthened investors' buying sentiment in multiple ways. With it, you don't.
As mentioned above, investors had a hard time managing physical share certificates; most were lost in transit or damaged, and the whole process was cumbersome. To simplify the situation, depository services came into existence. Now, the depository participant keeps your certificates/securities/mutual funds/ ETF/ government security in a demat account. It has drastically reduced the paperwork and the risk of counterfeit certificates.
These services are being adopted over physical certificates. Earlier, if the investor purchased 100 shares, he used to get a physical certificate as proof, which could be lost or stolen. Plus, if he sold it to the buyer, multiple problems of forgery, mismatched signatures, or postal delays led to transaction disturbance. It also gave rise to many scams and legal disputes. The depository services proved to be beneficial. With it, investors can now buy and sell their securities within a single, shorter settlement cycle, with no additional fees and no worries about incorrect or lost signatures.
Physical certificates had many costs associated with them, including printing and courier costs, stamp duty that was mandatory before the certificate was transferred to the other buyer, fraud and litigation costs in case of bad delivery or loss, higher brokerage and administrative fees, and storage costs for multiple records. These services have eliminated all these costs by turning them into electronic transactions. Now, investing in the stock market is easy, hassle-free, and pocket-friendly.
With so many papers around the corner, managing a portfolio was complex and challenging. The arrival of depository services numbed the challenge, and investors can now easily manage their diversified portfolios. They can invest in several financial instruments and asset classes, transfer their investments, conduct online tracking, and much more.
How to Select a Depository Service Provider?
Now that we know how a depository streamlines our investment management, the next question is how to select a depository service provider or participant.
The participant that you select should ensure security while handling the transactions. They should follow the 2-factor authentication method, use encrypted transactions, and have fraud protection policies in place for security.
Transparent pricing makes the participant trustworthy and credible. They should tell you about account opening fees, transaction charges, and AMC charges. Hidden costs are a strict no-no in dealing.
Customer support and quick response time distinguish a depository participant from its competitors. Find the one that provides you with proactive support.
The participant should be registered under CDSL to prove that it is eligible to be your partner.
SRE is a company with all of the above features.
It is believed that streamlined investments go a long way in wealth generation. Depository services can make the process easy and stress-free. SRE is a revolutionary depository participant committed to providing you with robust financial services with security as a stamp. Join hands with us to improve your financial journey!