InvestorQ : How is the demat account different from a bank account
Aditi Sharma made post

How is the demat account different from a bank account

Answer
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Nisha Chandani answered.
2 years ago


Quite often you will hear your broker telling you that a demat account is just like your bank account. That is correct in a very broad sense. Now, what do you do in your bank? You can fill up a deposit slip and put cash in your account. You can deposit a cheque or demand draft in your account. You can also withdraw cash from your account using a self-cheque or a withdrawal slip. Alternatively, you can also issue cheques against your bank account balance. Yes, there are a lot of online transactions you can do like payment of bills, transfers to other account holders etc. Can a demat account handle all that?
A demat account does not handle cash. It only handles shares and securities. So you cannot have any cash transactions in your demat account. But yes, you can handle all kinds of securities transactions. You can sell shares and debt to your demat account. You can buy shares and credit to your demat account. You can transfer shares from one demat account to another. What is more, you can also receive all your non-cash corporate actions like bonus shares, split shares, rights shares into your demat account directly. Just like the bank gets interested credit, the dividend credit for shares held in your demat account will go directly into your bank account.