What is the difference between a Demat account and a Trading account

Created by Rushikesh borade, Modified on Wed, 17 Apr at 2:36 PM by Rushikesh borade

Demat and Trading Account are often used as a synonym but these two are pretty different, let's understand how.

Demat Account: Also known as Dematerialization account, it's purpose is to convert physical shares into digital format and store them electronically. A person can have multiple securities like shares, debentures, bonds, government securities, mutual funds, ETFs etc in their Demat Account.

Trading Account: As we know Demat a/c is used to store the securities electronically but to BUY/SELL a security we need a trading account

So in simple terms, the Demat account is where you store your stocks, and the Trading account is where you buy or sell them.