Understanding the Difference Between Demat and Trading Accounts

The Indian stock market is a dynamic and exciting place to be involved. You must take the time to understand the fundamentals before starting your investment journey. Once you understand the workings, you can manage your investments seamlessly and be confident in handling them securely. 

 

You will need an active Demat and trading account to begin your investment journey. These accounts work closely together to facilitate investing in the Indian stock market. In many cases, these accounts will be issued as a two-in-one account, and it is important to know why.

Here is a table comparing a Demat account vs a trading account:

A Demat account stands for ‘Dematerialised Account’. This account holds and trades shares and securities in digital form. Here are some of the key features of a Demat account:

1. Safe and secure storage

All your holdings are stored on this Demat account in their electronic form. This eliminates any risk of loss, theft, or damage.

2. Easy transfer of securities

A Demat account makes transferring securities from one account to another easy. Instruct your DP to transfer the securities to the desired account.

3. Automatic credit of securities

When you purchase stocks, they are directly added to your Demat account. This removes the requirement for physical delivery of share certificates.

4. Multiple investment options

You can invest in a wide range of securities using your Demat account. These include equities, bonds, government securities, mutual funds, and Exchange-traded Funds (ETFs).

5. Minimum Amount Requirement

The minimum opening amount for a Demat account varies across providers and account types. Some brokers even offer zero-balance accounts.

To begin trading in the stock market, open a trading account with a brokerage firm. A brokerage firm is a financial institution that helps investors trade securities. The process is straightforward. It's similar to applying for a new bank account and submitting documents. Once your account is activated, you can start trading. 

 

Trading in the stock market involves placing orders through your trading account. You can choose from various order types like market, limit, and stop-loss. Once your order is executed, the shares are transferred to your Demat account. The funds are then debited from your bank account.

A trading account is used to buy and sell securities on the stock market. This account acts as a middleman between the stock market and your bank account. A trading account is generally opened by either a stockbroker or a brokerage firm.

 

Here are some features of a trading account:

1. Online trading

Trading accounts allow you to trade in the stock market online. This means you can buy and sell stocks from anywhere with an internet connection.

2. Multiple asset classes

Trading accounts allow you to trade in various asset classes. These include stocks, bonds, and mutual funds. You can also trade derivatives and commodities.

3. Customisable interface

Many trading platforms are customizable. They allow you to create an interface that suits your preferences.

If you are interested in opening a Demat and trading account, click on the ‘Open Account’ button on this page. You will be redirected to our partner’s website, Bajaj Broking. Here you must follow some steps to open a Demat and trading account instantly: 

1. Provide your bank and personal details 

2. Browse the different subscription plans and choose one 

3. Take a selfie video to complete eKYC 

4. Upload all the necessary documents for the application 

5. Complete the e-sign process through Aadhaar 

1. Documents Required

To open a Demat and trading account, you will need the following documents:

• Identity proof: PAN card 

• Address proof: Passport, voter ID, driving licence, or bank statement (last three months)  

• Bank details: Bank statement with IFSC code, cancelled cheque, bank account number 

• Income proof: For Futures & Options trading provide salary slips, bank statements, net-worth certificate, Demat holding statement, or ITR statement

• Easy and hassle-free account opening process

• Quick access to an advanced trading platform with real-time data and analysis tools

• Enjoy low brokerage charges and complete transparency

• Get dedicated customer support to assist you with the account opening process

• Get a loan against your Demat account by using it as collateral

• Access your account from anywhere through smartphones, desktops, tablets, etc.

 

You need a Demat account to trade in stocks with CDSL or NSDL. Fortunately, it's easy to determine which depository your Demat account is with. Simply look at your Demat account number. 

 

Easily open a Demat and trading account through Bajaj Markets in minutes. These come with a range of features that make it easy for you to manage investments effectively. By opening a Demat and trading account, you can access the user-friendly platform.