There is no compulsion that you must have both these accounts and the choice is entirely yours based on what you intend to achieve. The normal belief is that you need to open a trading account and a demat account simultaneously. Actually, you can choose to open only one of these accounts as the case may be. How is that possible? For example, if you want to invest in an IPO then demat account alone is sufficient. Once the shares are allotted to you, the shares will be credited to your demat account. You don’t need a trading account to get an IPO allotment and a demat account alone should suffice. The only catch here is that you cannot sell the IPO shares unless you have a trading account. Directly selling from the demat account is not permitted under SEBI regulations. In case you are buying shares purely with a view to hold it for the long term, then demat account alone is sufficient. Alternatively, if your demat account is only to get credit of shares gifted to you as transfer, then demat account is sufficient. But you will still need a trading account if you want to sell these shares.

Can you have a trading account without having a demat account? For example, if you only want to trade in futures and options, then you need not open a demat account. A trading account alone will be sufficient since F&O does not result in delivery. It is only when you want to hold equities that you require a demat account. But what about intraday traders since intraday trading does not result in delivery. As per SEBI regulations, trading in equity is not permitted unless you have a demat account that is mapped to the trading account. So, even if you only intend to trade intraday, you will still require a demat account to be opened along with the trading account.