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Difference between Demat Account and Trading Account

  • Highlights

  • Demat vs Trading

  • Demat Account stores your shares digitally

  • Trading Account helps you buy & sell shares online

  • Both Demat & Trading Account are essential to trade online

Are you confused between Demat vs Trading account? If yes, then you are at the right place! This article will clear all your doubts regarding Demat and Trading Account.

If you want to invest in stock markets, then opening a Demat and Trading Account will be your first step. You cannot buy shares directly from the stock market.

Demat Account vs. Trading Account

  • Trading Account: It helps you buy and sell shares in the stock market

  • Demat Account: It acts as a repository to store the shares you buy in digital format

In this digital era, the entire process of trading and storing shares has been digitized. A Demat and Trading account helps you participate in the online share trading. But what are their functions and how do they differ from each other? Read on to know.

The role of the two accounts

There are two parts to the trading process. First, you need an interface to buy and sell shares from the stock market, and next, you need to have a storage space to keep those shares. A Trading Account is your medium to transact while a Demat Account is a repository to store the shares and securities in dematerialized/digitalized way that you buy.

Before digitization, the shares and securities existed as paper a certificate which was also known as Physical share certificate.

Dematerialization is the process of converting physical shares into electronic format. A Demat Account stores these dematerialized shares. At any point of time, your Demat Account will show the shares and securities that you are currently holding.

However, Demat Account is only a repository. It does not help you transact in the stock exchange. For that, you need a Trading Account.

Trading Account is linked with your bank account. You can add money from your bank account to your Trading Account and vice versa.

Both Demat and trading account perform different functions in the online trading process. Nonetheless, they are closely integrated and make online share trading possible. Not only that, they make the entire trading process swift and convenient.

Open Demat and Trading Account

You will need both Demat and Trading Account to invest and trade in the stock market. Bajaj Financial Securities Limited provides a quick and paperless way to open your Demat and Trading Account online in less than 15 minutes. You have an option to open Demat and Trading Account online for free* and start trading in share market with savings on brokerage up to 99%**. The account opening requires you to fill a few basic details, upload your documents and e-sign the documents online. Without leaving the comfort of your home, you can get your own Demat and Trading Account and start making most of the market opportunities.

*Account opening is free for Freedom Pack, with zero Annual Maintenance Charge (AMC) for 1st year & Rs. 365+GST from the 2nd year.

**99% savings calculated as brokerage of ₹10 (approx) charged in BFSL vs brokerage of ₹1000 calcuated at 0.10% on 5 buy & sell orders each of a volume of 2 lakh.


Disclaimer: Investments in securities market are subject to market risk, read all the related documents carefully before investing. Visit our website for other Terms & Conditions.

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