Demat accounts and Trading Account are an important part of the stock market and play a significant role during trading. A Demat account is known as a digital certificate saving account and asset holder It is linked to an authorized bank account while the trading account is used to buy and sell shares and make the transaction.
How is a Demat account different from a Trading Account?
- In India, Demat accounts are managed by the depositories from NSDL(National Securities depositories Limited) and CDSL(Central Depositories Services Limited).
- You get different Unique IDs for each account(trading and Demat) to access different account functionalities.
- Equity shares, mutual funds, government securities, exchange funds, and other things are held and managed by the Demat account. The trading account enables transaction accessibilities to buy and sell shares and securities.
- The Demat account enables the additional security of the shares and securities and the Trading account secures the transaction flow.
For a fast, quick, and effortless transaction and securities protection, you should have both accounts.
Difference between Demat Account and Trading Account opening Process
Open Demat Account
To open a Demat account you need to contact the DP( Depository Participants), fill the details in the application form, submit important requirements, sign the agreement of duties and rights, and term conditions. Check the charges for registration and other accessibilities, verify by OTP or mail.
Open Trading Account
To open a trading account you need to contact the brokerage firm, for an application form for their fees and services.
Submit KYC and Important account information, documentation.
Wait for the authority verification.
You are good to go trading!