Difference Between Demat Account and Trading Account
WHAT IS A TRADING ACCOUNT?
Trading account is an investment account that holds securities, cash and other holdings like any brokerage account. With a trading account, an investor can buy and sell stocks as frequently as they want, that too within the same trading session.
It is a special account through which you can conduct transactions. This is called the trading account. Without Trading account, you cannot trade in the stock markets.
- When you register for an online trading account with a stock broker or a firm like Zerodha, Upstox etc.
- Each account comes with a unique trading ID, which is used for conducting transactions from Trading platform like kite (in case of Zerodha).
- Also, each broker offers different trading account features.
- Read more about features of trading by Zerodha, Upstox, Fyers.
In other words, a trading account gives you
- how much money you have in your trading account
- yours gains/losses on past trades
- trading facility.
WHAT IS THE DIFFERENCE BETWEEN DEMAT AND TRADING ACCOUNTS?
So here’s a basic definition :-
Trading account :- It’s just like bank (but with no interest return). Here your fund are transfer to put your money in stock market. And every gain in investing is also deposited in this account. It is useful for trading (buying and selling) shares.
Demat account :- It is a place where stocks are kept in electronic form. In past times, stocks are in paper form but nowadays everything get digitalised to eliminate fraud.Its a digital locker maintained by the depository (NSDL/CDSL), so one need not to worry about the safety of stocks bought from any broker Zerodha, Upstox , Fyers etc as long as your password is secure, since they are held by governement you can keep these stocks for long term as well like 20 years.
Linking: Every demat account needs to be linked to a trading account. Otherwise you can’t really sell them.
In short, trading a/c keeps your money and demat keeps your shares.
Best demat and trading account providers in india with highest number of active clients as per NSE data:
- Zerodha | 8,68,360 users | 9.8% market share
- Icici direct | 8,30,368 users | 9.3% market share
- Hdfc securities | 6,69,931 users | 7.5% market share
- Sharekhan | 5,28,983 users | 5.9% market share
- Kotak securities | 4,24,024 users | 4.7% market share
- Axis direct | 4,16,775 users | 4.7% market share
- Angel broking | 4,13,156 users | 4.6% market share
- Motilal Oswal | 3,22,042 users | 3.6% market share
- Karvy | 2,69,327 users | 3.0% market share
- IIFL | 2.24,111 users | 2.5% market share
I recommend opening a Demat and Trading account with only Discount Broker like Zerodha, which have good history and proven records, It provides good Customer support, Softwares, and Indicators for Professional trading, obviously you will save around 3-5% of the money on your brokerage.
Different Articles of Demat and Trading Account and how to choose the best Discount Broker in Indian Stocks Market:
- BEST AND CHEAP STOCKS BROKERS IN INDIA
- OPEN DEMAT AND TRADING ACCOUNT WITH ZERODHA INSTANTLY IN 2020?
- All stocks Articles
- Best online stocks broker in India for beginners in 2020
- Which discount broker is better, Zerodha or Upstox or FYERS in 2020?
- Best way to invest money in Stocks Market in India?
- Low slippage Broker in India
- Most Important Features of Online brokers for Successful trading
- Steps to OPEN DEMAT AND TRADING ACCOUNT WITH ZERODHA INSTANTLY IN 2020?
- Best way to Transfer Demat account from one broker to another?
- Open Demat account with UPSTOX for FREE along with Cashback
- When is the Right time to invest money in Stocks ?
- How many days does it take for a stock to be in a Demat account after taking the delivery
- Demat account vs Trading Account ?