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What is the difference between Demat and Trading account?

Others 473 views 3 replies

Can anyone explain the difference in demat account and trading account. 

Replies (3)

A demat account helps investors hold shares and securities in an electronic format.

A trading account is an interface that allows buying and selling of shares. · It acts as an interface between the investors' bank and Demat accounts.

 

Many people mistake a demat account and a trading account accounts as one and the same. However, that is not the case, and there is a clear difference between demat and trading account. If you wish to invest in the stock market, you will require both accounts since both accounts serve a specific purpose. You require a demat account to hold or store the shares you purchase electronically. On the other hand, you need a trading account to buy and sell shares. You can open both accounts simultaneously with SEBI (Securities and Exchange Board of India), a registered broker like IIFL Securities. Moreover, a broker like IIFL lets you open both accounts for free.

https://www.indiainfoline.com/knowledge-center/demat-account/what-is-a-demat-account

A demat account and a trading account are two separate accounts that are required to invest in the stock market. The primary difference between a demat account and a trading account is the purpose they serve.

A demat account is an account that holds your securities in an electronic form. It is similar to a bank account where you can deposit and withdraw your securities. When you buy or sell securities, they are credited or debited from your demat account. A demat account is essential for holding shares, mutual funds, bonds, and other securities in electronic form.

On the other hand, a trading account is an account that is used to place buy or sell orders for securities. It is like a platform that allows you to trade in the stock market. A trading account is used to place orders for buying or selling securities, and it is linked to your demat account. The transactions that take place in your trading account are settled in your demat account.

For more information visit:- 

https://www.shareindia.com/open-trading-account


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