InvestorQ : Is the purpose of trading and demat account the same?
Niraj Mehta made post

Is the purpose of trading and demat account the same?

Answer
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Swati Naik answered.
2 years ago


Quite a few investors get confused on the nuanced difference between the trading accounts and demat account. Essentially, the trading account is a flow and the demat account is a stock. While the trading account is reviewed and measured over a period of time, the demat account is viewed at a particular point in time. Here are five key differences between a demat account and a trading account.
Demat accounts are used to store the actual shares and other securities you buy in the market. To that extent, it can be compared with your savings account in a bank. Just as a bank account holds cash on your behalf, the demat account holds shares and other securities on your behalf.
A trading account operates in the same way as your current bank account and serves as a link between your bank account and your demat account. Trading account essentially is meant for executing transactions. Thus, while a demat account works as a storage facility for your securities, a trading account is required when you want to buy or sell shares in the stock market.