What is difference between demat and trading account?

 

demat and trading account: If you are going to invest and trade in stock market, You have to open demat account and trading account. Trading account give you facility to buy and sell shares and A demat account give you facility to hold your shares.

Trading Account: Trading Account is an account that allows an individual to buy and sell securities such as stocks, bonds, and mutual funds. A trading account is opened with a broker, who facilitates the buying and selling of securities on the stock exchange.

Demat Account: Demat Account on the other hand, is an account where shares and securities are held in electronic form. It stands for “dematerialized” account, which means that the shares are held electronically and not in physical form. A demat account is opened with a depository participant (DP), who acts as an intermediary between the investor and the depository (CDSL or NSDL).

Best Demat Accounts in India

1. Zerodha

2. Angel

3. Upstox

In summary, the main difference between a trading account and a demat account is that a trading account is used for buying and selling securities, while a demat account is used for holding securities in electronic form. In India, it’s mandatory to have a demat account to hold shares in electronic form, but you can also trade shares without demat account.

It is also important to note that mostly brokers offer both trading and demat account services through a single account, which allows you to buy, sell and hold shares in the same account.