Partner With Us NRI

Open Free Demat Account Online with ICICIDIRECT

Can I Trade without Demat Account?

You cannot trade in the stock markets without a Demat Account. This is because shares today are available only in dematerialized, i.e. electronic form, which is the only way shares can now be traded. So, every time you buy or sell a share, it is reflected in your Demat Account.

What exactly is a Demat Account?

A Demat Account is much like your bank account, except that it holds your shares instead of money. Every time you buy shares, they are credited to your Demat Account, just like depositing money in a savings account. Similarly, each time you sell shares, they are debited from your account, just like funds are debited when you issue a cheque or make an online payment.

You can open a Demat Account with a depository participant, or DP, which could be your bank, stockbroker or a non-banking financial company (NBFC). DPs are representative of the two central depositories in India, the NSDL or CDSL, which serve as the link between the customer and the brokerage firm providing the Demat service.

Additional Read: Features and benefits of a Demat Account

Why do you need a Trading Account?

It’s not enough to have a Demat Account for trading in shares. You also need a Trading Account. The Demat Account merely holds your shares, but trades are executed through the Trading Account. As such, the Trading Account is just as indispensable as Demat Accounts are for stock trading. Only members of stock exchanges like the Bombay Stock Exchange and National Stock Exchange are allowed to open a Trading Account for investors to trade on the exchange.

If you want to buy and sell shares, you will have to do it through a broker, who will levy brokerage fees for allowing you to do so. You also have the option to open your Demat Account with stock-trading subsidiaries of big banks. Such banks and stock broking firms offer three-in-one accounts that allow you to combine banking services with the existing Trading and Demat services.

Most share-trading today takes place online, making it easier for retail investors to participate in the stock market. The seamless interaction between trading, funds transfer and dematerialization of securities makes the process convenient and hassle-free.

Stockbrokers too offer Demat and Trading Accounts. Irrespective of whether you select a bank or a brokerage firm, you have to deposit a certain sum in your Trading Account to pay for any transactions. The services provided by both entities are similar, with the main difference being in terms of the charges levied, the quality of services provided and the type of brokerage you opt for, between full-service and discount brokers. 

Additional Read: Documents Required To Open A Demat Account


To sum up, there’s no way you can trade on the stock market without a Demat Account. If you are interested in buying and selling shares and making the most of the Indian growth story, you need to get a Demat Account, as well as a Trading Account.


    1.  Can I buy shares without Demat Account?

No, you cannot trade in the stock market without a Demat Account. This is because all shares today are stored in the dematerialized format, which are reflected in your Demat Account. You will also need a Trading Account.

    2.  Is a Demat Account necessary?

Yes, a Demat Account is mandatory to trade securities in the stock market.

    3.  How can I invest without a Demat Account?

If you want exposure to the stock market without opening a Demat Account, going the mutual fund route is ideal. You can invest in mutual funds via an AMC office or website, independent portals, a registered mutual fund advisor, transfer agents or even through your bank.

    4.  Can trading be done without Demat Account?

Theoretically, it is possible to engage in intraday trading with just a Trading Account. When you do intraday trading, your trades are usually squared-off at the end of the day, so there is no need for their transfer. However, practically speaking, you need a Demat Account even for trading. Brokers and brokerage firms do not allow you to trade without a Demat Account.

    5.  What happens if I don't use a Demat Account?

Without a Demat Account, you will be unable to trade securities, i.e. buy and sell shares or other instruments. With just a Trading Account, you will only be able to invest in IPOs. 

Disclaimer: The contents herein mentioned are solely for informational purposes and shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Most Popular

  • 13 May 2022
  • ICICI Securities

The Five-Point Financial Planning Checklist For Your Family

Whether you just got married or planning to have a baby or have dependents, you should have financial plans for every stage in your life to ensure a secured future for your family members. Here are five things you can do financially for your family.   

  • 12 May 2022
  • ICICI Securities

What is a Zero Coupon Bond?

You get fixed returns in the form of interest until maturity when you invest in a bond. Zero-coupon bonds work a little differently. In this article, find out what zero-coupon bonds are, their advantages and whether you should invest in them. 

  • 12 May 2022
  • ICICI Securities

What are Cross Currency Pairs?

The forex market is the largest financial market globally. Currency trading is a lucrative and booming business. While most currencies trading happens in relation to the US Dollar, some don’t. That forms the basis of cross currency pairs. Here’s what you need to know about it. 

  • 12 May 2022
  • ICICI Securities

Investing principles from Benjamin Graham: The Father of Value Investing

Benjamin Graham was a British born economist, professor, and investor who taught at Columbia University. He was also a mentor to some of the most famous investors of the 20th century, including Irving Khan, John Templeton, & Warren Buffett. Buffett called him "the second most influential figure in his life, only after my father". 

  • 12 May 2022
  • ICICI Securities

How to Invest in Nifty 50?

The Nifty 50 is the benchmark index of the National Stock Exchange. It represents the 50 largest companies listed in India. Investing in the Nifty 50 can be a good idea for those looking to make index-linked returns. Here’s how you can invest in the index. 

  • 12 May 2022
  • ICICI Securities

Investment philosophy of Cathie Wood: The most powerful woman on Wall Street

Catherine Duddy Wood, also called Cathie Wood, is an investor who primarily invests in disruptive technologies and is the founder, chief executive officer, and chief investment officer of ARK Investment Management, LLC, an investment management firm mostly active in the United States.

  • 11 May 2022
  • ICICI Securities

How to Use Technology to Improve Your Finances

Technology has made life simpler for everyone. In the realm of personal finance, technology has streamlined many processes—from budgeting to automating your payments. On National Technology Day, let’s look at how technology has transformed our finances. 

  • 11 May 2022
  • ICICI Securities

How to Invest in your Every Goal with Mutual Funds?

Each of us is unique. We have different needs and goals in life. Some of us can ride along swinging markets, while some may need a relatively conservative investment tool. 

  • 11 May 2022
  • ICICI Securities

Four Reasons Why Entrepreneurs should Invest in Equity Mutual Funds

Equity mutual funds provide growth opportunities not just for individual investors but also for entrepreneurs and corporates. They make excellent investments for anyone looking for wealth creation. This article will give you four reasons why businesspeople should consider investing in equity mutual funds.