Difference Between Demat and Trading Account

If you want to start investing in the share market then you might have come across Demat account and Trading account. For starters, these two are different which might be the puzzling questions as to which account is best suited for someone.

In order to understand more about what works the best between the two, we will learn the major differences between demat and trading account through the below article.

Difference Between Demat Account and Trading Account

A demat account also known as dematerialized account which is an electorigic or digital form of holding your bonds, shares, mutual funds and other securities. On the other hand, a trading account allows you to buy/sell the shares present in the physician share market.

How to Transfer Shares from One Demat Account to AnotherStockbroker Meaning

In general when someone asks which accounts necessary, then both since the demat allows you to store the shares in a digital form whereas the trading done through your trading, allowing you to buy, sell and invest in the share market.

But you can always have a trading account without a demat account but you cannot have only a demat without a trading. But in cases such as investment in an IPO for any public company, a demat is necessary but not a trading.

How to Open Demat and Trading Account Together

Yes, you can always open both the accounts together or not as well. Due to the recent development in the Investment market, a lot of services such as Zerodha, Upstox and more launched which will help you create your demat and trading together.

There are charges to your account that are annual recurring charges and at the same time, as you know behind the transactions made always a service tax aligned that is how these services actually work.

Even in the case of an offline brokerage where you might investing, there still a brokerage charge applicable either on the basis of profit made, monthly or annual as well.

  1. Is a demat account necessary for trading?

    No, a demat account is not necessary for trading because you can always buy and sell shares in the share market through your trading account or else through brokerage as well. But in cases where you want to invest in an IPO for public companies, you will need a demat account.

  2. Is a demat account the same as a trading account?

    No, a demat account is not the same as a trading account because a demat account is a digital form of saving the investments in the form of bonds, shares and more. Where a trading account is which helps you to invest to buy or sell the shares in the physical share market.

  3. Is Zerodha a demat account or trading account?

    Zerodha provides you with the option to have both a demat and trading account as well.

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