Want to invest in the Stock Market, but before let’s compare demat account and trading account on behalf of the various parameters. As the interest in the share market is growing over time, it is important to know how to begin the trading and investing journey and the required documents for the same.
The article will clarify the difference between the trading account vs. the Demat account and give insight into India’s best demat and trading account. Talking about the share market trading account and demat account are the important accounts to start with investing.
Let’s Compare Demat Account and Trading Account
What is a Demat Account?
Demat account- talking about the most basic account the demat account is simply an account that holds the shares electronically. The account helps in converting the stakes into the electronic format and helps in dematerializing them. When you open a demat account, you will be provided with a demat account number which will help settle the trades in electronic form.
Demat account working is quite similar to the bank account where you keep the money to deposit or withdraw. Here too it is a similar concept but for stock trading. The securities in the demat account are held accordingly to the deposit and withdrawal. You don’t need any early shares to own a demat account. Even if the account balance is zero, it will be active. Below we mention best demat account in India with complete details.
What is a Trading Account?
Trading account- demat account holds the information electronically, but you need a trading account if you want to trade in the stock market. This comes into use when a company lists its share in the market, and one can buy the stock or sell it accordingly through the trading account.
The account can be provided via a registered firm or a stockbroker. The account comes with an assigned unique trading ID which grants you access to conduct trading transactions.
Difference between Demat Account and Trading Account
Here are the details of what makes the trading account and Demat account different from each other.
Comparison of Demat Account and Trading Account
The functionality of a Demat Account and Trading Account
One of the major differences comes in the working of both accounts. The working of both the accounts is quite different from each other.
A trading account is used for the selling and buying of the stock it gets debited from the demat account you hold and sell the securities in the market.
On the other hand, the demat accounts hold the financial information and documents in electronic form. This works in both the way you can change the electronic securities into the physical condition as well.
The perspective of the two accounts
Another thing is the nature of the two accounts. Talking about both the trading account functions in the same way as your current bank account would also link up to your Demat and your bank account. This works quite similarly to how you sell your shares in the market by withdrawing them from your Demat account.
On the other hand, a Demat account is where the shares and securities you buy from the market are stored. Unlike a trading account that functions like a current bank account, a Demat account works like a savings account.
The use of trading and demat account in India
Both of the accounts have their importance in the share market, which differs. When the investor needs to sell or buy any stock, they use the trading account. The money debited or credited in the account and shares are reflected on the demat account, which gets updated in the account.
This happens similarly when you sell the shares through the trading account. The sale proceeds are credited back to the bank account connected to the demat account. The debited amount will be displayed on the demat account and will be sold in the market accordingly.
So if you want to trade in the market, you need a mandatory demat account. Then only can you proceed with the transactions, and the similarity of the trading account is important.
How to open a Best Demat Account in India
Here are how you can open demat account with us and avail amazing offers: follow the steps and open the account in 10 minutes if the documents are ready.
Step 1: Look for the depository agent or the depository participant to fill the form required for opening a Demat account. Also, you can easily access the list for the depository participants (DP) on websites of depositories like Central Depository Services (India) Ltd and National Securities Depository Ltd.
Step 2: fill in the necessary details on the account opening form, giving out the ID documents and address proof copies.
Step 3: You need to sign an agreement with the DP that outlines the details of your rights and duties as an investor and DP. Also, you have the right to receive a copy of the form so remember to collect it.
Step 4: After this, the DP will give you the demat account number, also known as the Beneficial Owner Identification Number.
Also, you can open a Demat account online without going anywhere, just from the comfort of your home.
How to open a Trading Account?
Here are the steps that you can follow to open a trading account easily:
Step 1: you need to search for the broker or the firm that deals in trading the stock market. Begin with selecting a broker or a firm.
Step 2: make an in-depth study of all the charges taken by the firm, the brokerage rates, and the services included.
Step 3: you can contact the brokers listed for the account opening query.
Step 4: you need to fill the form and complete the KYC process details. Submit all the required documents along with the id and address proof.
Step 5: Verify the application process.
Step 6: After this, you will get all the details of your trading account. Get the details of your trading account.
Also, you can apply for a trading account online. Plus, many brokerage firms provide 2 in 1 account, which means demat and trading accounts in one account.
Best Demat and Trading Account in India
This part covers the Best Demat account in India and top trading accounts in India. You can grow through the article and look for the best options available in the market.
Here is the list of best demat account in India
1. Upstox Demat Account
If you want to start in the stock market, opening a demat in Upstox is the best. It is one of the most trusted platforms to open a Demat account. The company charges a Flat Rs. 20 per order irres[ective of the trade size, making them one of the most affordable platforms. Also, the company provides Digital Gold, IPO, and Mutual Funds at zero brokerage.
2. Zerodha Demat Account
Zerodha is one of the other popular demat account platforms in India. The company charges a flat fee of rupees 20 or 0.03% as the brokerage charges (whichever is lower) per order.
3. 5Paisa Demat Account
Another famous platform to open a demat account is 5Paisa. The company also charges a Flat Rs. 20 per order. This is another affordable platform and is best for beginners. Also, the company offers the client a free Demat account for a limited time.
4. Sharekhan Demat Account
Sharekhan was started in the year 2000. It has been 21 years, and the company has over 16 lakh customers. It is one of the few companies which has made online trading popular in India. The company provides a wide range of financial products and services. Sharekhan comes with good products and services. The company provides a free demat account opening. Plus, they also provide the offer of zero AMC for the first year. The company is not the most affordable option in the market as it charges 10 paise per share, which eventually makes it hard to trade in low-priced stocks.
5. Angel Broking Demat Account
Another well-known company for the demat account is Angel Broking. The company opened a Lifetime free Demat account. There is no upfront payment in Angel Broking and the initial margin deposit on the amount you have deposited in the account.
The minimum brokerage charged by the company is rupees 30, irrespective of the trade size of the investment. The transferring of the money is seamless, so this is one of the best platforms.
6. ICICI Direct Demat Account
ICICI Direct is also one of the popular brokerage firms in India. The company has a customer base of 40 Lakh. ICICI Direct is known for its seamless trading experience. Also, the platform provides you with the most advanced and intuitive trading tools.
7. HDFC Securities Demat Account
HDFC Securities have around 17 lakh plus customers. The company is the subsidiary of HDFC Bank, which was started in the year 2000. The platform allows you to trade seamlessly in stocks, derivatives, mutual funds, fixed deposits, NCDs, insurance, bonds, and currency derivatives. The easy transfer of funds makes it simple yet effective to use.
8. Kotak Securities Demat Account
Kotak Securities is the subsidiary of the famous Kotak Mahindra Bank. The company was started in 1994. The company has a current customer base of 17 lakh plus users. Kotak securities allow its customers to invest in IPOs, Mutual Funds, or Currency Derivatives. Further, it offers you offline options alongside online trading.
Best Trading Account
Here is a list of best trading account in India
1. ICICI trading account
ICICI direct is one of the most popular firms that provide 3 in 1 account, including ICICI Bank Account, ICICI Trading Account, and ICICI Demat Account. The account offers the users a smooth trading experience for its clients on board. The company also provides multiple types of brokerages plans, i.e., I-Secure Plan, ICICIdirect Prime Plan, Lifetime Prepaid Brokerage Plan, and Neo Plan.
2. Trade Smart day trading account
Another well-known brokerage firm in Mumbai offers a discount brokerage in stock, commodity, and currency trading segments. The company is also active with VNS Finance & Capital Services Ltd. it offers the client offers to trade in NSE Cash, NSE F&O, NSE Currency derivatives, BSE Cash, MCX Commodities, and depository service of CDSL.
3. SBI day Intraday trading Demat account
SBI It is another well-known discount broking subsidiary of SBI bank. The company offers the Demat account-related services through SBICap Securities Ltd (SBICap or SBICapSec). It started in the year 2006, providing all investment and loan products. The company is a SEBI registered depository participant with CDSL and NSDL. They provide Equity, Currency and Derivatives trading, Depository services, IPO services, Mutual Funds, Bonds, NCDs, Home, and Car Loans.
4. Upstox day Intraday trading Demat account
Another well-known first cost broking firm in India provides trading opportunities at a lower price. The services provided by the company are in trading in different sectors such as equities, commodities, currency, futures, options. The platforms you can trade on are Upstox Pro Web and Upstox Pro Mobile trading platforms. The company is backed by a group of investors, including Kalaari Capital, Ratan Tata, and GVK Davix.
6. SAS Intraday trading Demat account
The company was bootstrapped in 1995, which started as an online discount brokerage firm offering brokerage services for stocks, future and options, currency, and commodities at NSE, BSE, and MCX exchanges.
The company started offering brokerage services in 2013. According to the facts, the company currently has a client base of 30000+ clients spread across 750+ cities of India. The company’s current status as a daily average turnover of Rs 10,000+ Cr, in which they contribute to over 1% of the total Indian market turnover with an average of 1 lac + orders a day.
The company provides its brokerage services from the 1 centralized office located in Delhi. Also, there are no account minimums or hidden costs, which translates into lower costs and hassle-free trading.