Difference Between Demat Account and Trading Account

: Blog; 21 June 2017; Hits: 46689

Difference Between Demat Account and Trading Account

In this article you will learn about these similar quires:

Demat Account Vs Trading Account
Why Demat Account required?
Why Trading Account required?
Who can open Demat Account?
Who can open Trading Account?

Depository Beneficiary Account is popularly known as Demat Account. Demat Account is like an electronic locker to keep securities in electronic (dematerialised) form.

Securities like Bonds, Debentures, Equity Shares, Preference Shares or any securities having ISIN can be held in Demat Account. Securities having ISIN can be held in Demat Account even when they are not listed on any Stock Exchange. Client opting for equity segment (cash market) in Trading Account are mandatorily need to have Demat Account. Demat Account is to be open with Depository Participant (DP) of either CDSL or NSDL. ProStocks is Depository Participant of CDSL. Your Stock Broker can also be your DP. All Stock Broker are not DP.

Trading Account is used for buying and selling listed shares and securities at recongnised Stock Exchanges and different from Demat Account. Trading Account can be opened only by Stock Broker. Your Trading Account will be used for both trading as well as investment. Shares purchased through Trading Account are held in Demat Account and shares sold through trading account are transferred from Demat Account to Stock Exchange through Stock Broker.

Sr.No	Difference	Demat Account	Trading Account
1	Account opening	By Depository Participant popularly known as DP	By Stock Broker / Broker Member of recongnised Stock Exchange
2	Purpose	To hold listed and unlisted securities electronically	To buy and sell shares and securities at recognized Stock Exchanges
3	Regulator	SEBI	SEBI
4	Quasi Regulator	Depository	Stock Exchange
5	Mode of operation	By Client electronically ( through internet login) as well as physical instructions , Stock Broker through limited purpose POA given by Client	Online ( Operate through online internet login ), Offline ( through telephone call and trade, Email , personal visit etc.). Stock Broker cannot take POA.
6	Multiple	Multiple Demat Account with one DP with purpose	Only one Trading Account can be opened with one Stock Broker
7	Single or Joint	Single or jointly with other individual	Single only. Joint Trading Account becomes partnership firm , hence not possible as individual
8	Constitution / category	Partnership firm cannot open in their name but can open in the name of the partner/s for the benefit of partnership firm	Partnership firm can open Trading Account

S P Toshniwal
Founder and CEO
www.prostocks.com

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Team ProStocks

Comments (10)

Guest - Neha Varma
about 7 years ago

Thanks for sharing this information in your blog. I used to think that demat account and trading account are one and the same. This blog has helped to erase some common confusions. Thanks for sharing this blog. Can you share in your next blog about the merits of having a demat account online?

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Team ProStocks
Guest - Neha Varma

about 7 years ago

All Demat Account are online . Read more about easi and easiest at our FAQ section

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Guest - Amanpreet kaur
about 2 years ago

thanks for sharing best information about the demat account and trading . It is very helpful for me.

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Guest - broker Reviewfx
about 2 years ago

Thanks for sharing wonderful information about the difference between demat account and trading account .

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Guest - Broker Reviewfx
about 2 years ago

Thanks for sharing wonderful infromation about the trading account and demat account .

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Guest - Maheshwari Institute Indore
about 2 years ago

Thanks for posting superb information about the trading account and demat account.

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Guest - lalitkukreja
about 1 year ago

Understanding the distinction between a demat and trading account is crucial for investors. Exploring the features of a demat account app can help users grasp their functionalities effectively.
Click here to know more: https://play.google.com/store/apps/details?id=com.indiainfoline&hl=en-IN

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Guest - Sahil Dodeja
about 1 year ago

This blog explains everything regarding demat and trading accounts. An electronic digital account known as a Demat account allows investors to electronically hold shares and other securities. With a trading account, investors can buy and sell shares and other
securities on exchanges using a digital account. To open a hassle-free demat account check out the IIFL Demat account app.
Click here to know more: https://play.google.com/store/apps/details?id=com.indiainfoline&hl=en-IN
"

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Guest - sahil madhwani
about 1 year ago

To know the difference between a Demat account and a trading account, check out the blog post above. To open a safe and secure Demat account, go ahead with the BlinkX Demat account app.
Click here to know more: https://play.google.com/store/apps/details?id=com.msf.blinktrade&hl=en-IN

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about 10 months ago

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