How does a trading account differ from a demat account?
A trading account places buy or sell orders in the market, while a demat account holds the securities bought.
In simpler terms, a trading account is for transactions, and a demat account is for storage.
Both accounts are necessary for trading in the stock market.
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How does Demat account work?
You open a Demat account with a stockbroker. When you buy shares, it will be directly credited to your Demat account. When you sell shares, they are debited from your account.
What is a Demat Account?
Imagine a safe deposit box at a bank, where you can keep your valuables. A Demat account is like a digital safe deposit box for your shares and securities. Instead of physical certificates, you hold these investments electronically.