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Central Depositories and Bank Accounts (Financials Series Part - 4)

Background

We come across the terms “Central Depository Services Ltd.” (CDSL) and “National Depository Services Ltd.” (NDSL) when reading about Stock market. These are private organizations but seem to be the only entities in India that seem to be centralized entities serving no matter which broker you do business with. What is a depository?

What is a depository?

Types of Accounts in Depositories (Banks)

  1. A time deposit is an interest-bearing account and has a specific date of maturity such as a Fixed Deposit (FD) a.k.a Certificate of Deposit (CD)
  2. A demand deposit account holds funds until they need to be withdrawn such as a checking or savings account

Why does it sound like Repository?

Additional Reading

  1. Investopedia page on Depository