Your Demat account is like a safety vault where you keep all your investments in different securities, in electronic format. Now like for a physical vault, there is a code to open it, isn’t it? Similarly, for the Demat account, there is BO ID, which stands for Beneficial Owner Identification ID.
In this article, we will discuss this BO ID in detail, how it works, why it is important, how you can get the same and a lot more. This is crucial for every investor with a Demat account.
What is BOID?
BO ID can be defined as a unique identification code, which is given to every Demat account holder whether he or she is registered with CDSL or NSDL. The Depository participant, or in simple terms the brokerage house, with which the investor/ trader has opened the Demat account assigns the BO ID.
For CDSL Demat account holders, the BO ID is a 16-digit code, which is a mix of alphabets and numbers. The first eight characters represent the ID of the DP and the last eight represent the Client ID.
For NSDL Demat accounts, the BO ID is a 16-digit code only but it always starts with IN and then the remaining 14 characters are numbers. For instance, an NSDL BO ID can be IN12345678910112 while a CDSL BO ID can look like 94982280ABZ012534.
BO ID is crucial for every Demat account holder as it keeps track of all the transactions happening in the account and the movement of the assets in your account as well. This ID irrespective of the device from which you are logged in, or irrespective of what kind of securities you are trading, keep track of transactions and movement in the Demat account.
How Does BOID Work?
The BO ID is required at different phases of trading and investments. When a Demat account holder places an order, the brokerage house with which it is trading/ investment (DP) verifies the order using the BO ID of the account holder. Then the broker places the trade on the respective stock or other exchanges for further processing.
Then BO ID is also required while transferring securities from one account to another. It is recorded at both the end of the transactions, making sure the securities go into the right account.
Companies issuing dividends, bonus shares and other benefits to the investors use the BO ID of the Demat amount holder to transfer the benefits. So, this ID is essential at every step involved in investments and trading.
Key Features of BO ID
- Unique 16-digit Number: A BO ID is a fixed 16-digit code that identifies each Demat account holder in CDSL.
- Combination of Two IDs: It is formed by combining the Depository Participant (DP) ID (first 8 digits given to the broker or bank) and the Client ID (last 8 digits unique to the investor).
- Ownership Tracking: It keeps a clear record of who owns which shares, bonds, or mutual funds.
- Transaction Security: Every buy, sell, or transfer of securities is directly connected with this ID.
- Digital Record Keeping: Investors no longer need paper share certificates, as all data is stored safely online.
- Regulatory Compliance: BO ID helps maintain transparency and follows the rules laid by market regulators.
How to Create a BOID?
For creating your BO ID, you have to follow the following steps –
- Pick your DP: The BO ID is generated when you open a Demat amount with a depository participant (DP), or broker in a common language. Therefore, you need to pick the right brokerage house as your DP to create your BO ID. Findoc here can help you as it offers a wide range of brokerage services, which you can use for creating BO ID.
- Demat Account opening: Once you pick your DP, for instance, you picked Findoc, you have to then open the Demat account. You need to share your details such as name, address, occupation, income, and other details for applying for the Demat account.
- KYC: The next step is to upload all your documents that are required for opening and KYC verification. The documents you need to upload will include PAN, AADHAAR, Bank Statements, Photos, and other details.
- Agreement: Once the KYC is done, you will be shared an agreement, which you need to sign and which is to ensure that you are obliging with the terms and conditions of the DP for opening the Demat and trading account.
- Make payment: If there is any account opening charge, you need to pay the same to finalise the account opening procedure. With Findoc, you can open Demat account online free of cost and maintain it with just a one-time maintenance fee, isn’t that great?
- Get your BO ID: Once all the above steps are completed, your Demat account will be live and your BO ID will be shared with you on your registered email id.
How to Find BOID?
Often people find it difficult to check their BOID. However, it is quite simple and doesn’t include many steps.
All you need to do is to –
- Open your Demat account, and log in using your username and password
- Then go to the ‘My Profile section or ‘ Account information tab in the Demat account
- Here you will find the BO ID under the account information or your profile. It is a 16-digit alphanumeric code.
- You can note down the BO ID to use it without hassle in the future.
Why BOID is So Important?
The BO ID of a Demat account holder is important for so many aspects. Let’s understand each one of them –
- Firstly, with the BO ID, the Demat account holder can have track of all his investments online as well as offline mode. He or she can track not just the portfolio valuation, but also each of the transactions that take place in the account.
- This brings us to the safety quotient of the portfolio and the account holder. With the rise in cybercrimes, Demat accounts are not spared even. However, with the help of BO ID, you can keep track of each and every transaction done in the account, so, the risk of online theft comes down significantly.
- Thirdly, with the help of BO ID, you can keep all the records of your transactions online. You do not have to maintain any physical document or journal. This makes the entire process easy and quick.
While BO ID is highly useful for every investor and trader, they also need to keep in mind that this id has certain limitations as well.
- For instance, the BO ID for a Demat account opened on CDSL will be different from a Demat account opened with NSDL.
- Then this id cannot help in tracking any physical trading or investments done, without using the Demat account.
- Another major concern is BO ID is entirely dependent on the DP, so choosing the right brokerage house with whom you open a Demat account is essential.
Key Benefits of BO (Beneficial Owner) ID
- Clear Identification: Ensures that every account holder has a separate code, reducing confusion between investors.
- Simple Transactions: It allows smooth buying, selling, and transferring of securities without delays.
- High Security: As every transaction is tied to a single BO ID, it reduces errors and the chance of fraud.
- Accurate Records: Helps in maintaining precise statements of all investments and activities in the account.
- Direct Corporate Benefits: Companies use BO ID details to credit dividends, rights issues, or bonus shares directly to investors’ Demat accounts.
- Easy Account Access: Investors can check holdings, monitor past transactions, and download statements anytime.
- Market Compliance: It plays a key role in making trading more transparent for regulators and depositories.
- Boosts Investor Confidence: By offering a secure and organised system, it gives confidence to investors that their investments are well-protected and tracked.
BO ID Limitations
- Accuracy Required: The BO ID is linked with the account details given during registration. If those details are wrong, it may cause issues later in transactions.
- Difficult for Multiple Accounts: Investors who hold more than one Demat account must remember and manage several BO IDs, which can sometimes be confusing.
- Privacy Concerns: Since the BO ID is linked to personal and financial data, there is a risk if the information is not protected by the broker or depository.
- Dependence on System and Rules: Any change in regulations or operational processes can impact how BO IDs work.
- Processing Errors: Mistakes from the DP while linking BO IDs may cause delays in transfers or settlement.
- Challenging for Beginners: New investors may take time to fully understand the role of BO ID in trading and investments.
What is a Depository Participant (DP)?
A Depository Participant (DP) is an agent or middleman that connects investors with the depository. A depository is an organisation that stores securities like shares, bonds, and mutual funds in electronic form. To open a Demat account, an investor must register with a DP. DPs can be banks, brokers, or financial companies that are authorised by SEBI. They handle essential services such as opening Demat accounts, updating records, settling trades, and helping investors with transfers. Each DP has a special code known as a DP ID, which is part of your 16-digit BO ID. Simply put, a DP sees to it that all securities are securely stored and transactions are executed in the right manner on behalf of the investor.
How does a Demat Account differ from a DP ID?
A Demat Account is a repository account where your shares, bonds, and securities are held in a digital format. It has a 16-digit Demat number that is allotted to each investor. This number is divided into two segments. The initial 8 digits are the DP ID, representing the opening bank, broker, or financial institution. The last 8 digits are the Client ID, that is, your account holder identity. Together, they form the entire BO ID. The DP ID by itself is the broker or bank’s and is the same for all clients of the same DP. The complete Demat account number (DP ID + Client ID), however, is yours as an investor.
Conclusion
Thus, the next time you open your Demat account; do not forget to look for your BO ID. Keep a note of the code for your future reference and ease of use. This ID is essential for every investment you make using your Demat account.
Frequently Asked Questions
If you forget your BO ID, you can refer to it in your Demat account statement, the trading app of your broker, or communicate with your Depository Participant. They will give you your 16-digit BO ID after authentication.
A BO ID is always 16 digits long. The first 8 digits are the Depository Participant (DP) ID, and the remaining 8 digits are the distinctive Client ID provided for every Demat account holder.
You can log in to your broker’s trading platform or check your Demat account statement. If your transactions and holdings show correctly under the BO ID, it means your account is active and valid.
A BO ID acts like the account number for your Demat account. It ensures secure ownership tracking, smooth transactions, and correct credit of benefits such as dividends, rights issues, and bonus shares to your account.
A DP ID is an identification number given to the broker or bank that opened your Demat account. It is important because it shows which Depository Participant manages your account and forms part of your BO ID.
Yes, every Demat account must be opened through a Depository Participant (DP). The DP acts as a middleman between you and the depository, helping with account opening, trade settlements, and keeping your securities safe in electronic form.
Leave a Reply