InvestorQ : Should I opt for a 2-in-1 trading account or is it better to opt for a 3-in-1 trading account with the broker?
Swati Naik made post

Should I opt for a 2-in-1 trading account or is it better to opt for a 3-in-1 trading account with the broker?

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Niraj Mehta answered.
1 year ago

Offline trading accounts are the traditional accounts that do not offer internet trading. You can call up your broker or walk into your broker’s office and trade. The online accounts, on the other hand, offer internet trading. That means you can execute your trades sitting in the comfort of your home or your office using your laptop, PC or even your smart phone. An online account tends to attract lower brokerage and is also a lot more convenient and flexible for the trader. With the proliferation of app based trading, online is being more the norm than the exception. When you open an online trading account, you can make a choice between a 2-in-1 account and a 3-in-1 account. What is this classification and how does it work for you?

Within the ambit of online trading accounts let us understand the difference between 2-in-1 accounts and 3-in-1 trading accounts. The 2-in-1 trading account basically integrates the trading account and the demat account. Thus, when you buy shares in your trading account the movement into your demat account on T+2 day is seamless. Similarly, when you sell shares, the debit to your demat account on T+1 date is also seamless. Brokers without a group banking operation can only offer 2-in-1 trading accounts although 3rd party banking integration is itself quite simple and straight forward these days. The 3-in-1 account is only offered by brokers that have banking operations within the group. Thus, ICICI Securities, HDFC Securities, Axis Securities, SBI Securities and Kotak Securities are able to offer 3-in-1 accounts due to their banking interface. While 2-in-1 accounts are a must to ensure seamless relationship between trading and demat, the 3-in-1 is not a major advantage as most broking platforms will allow you to transfer funds almost seamlessly into your trading account. From a trader’s perspective, the 2-in-1 account is good enough for most needs.