Partner With Us

Difference Between Demat Account And Trading Account

Opening a Demat account is the first and foremost thing to Invest or trade in the stock market. A Demat account is used to store various investments like shares, bonds, mutual funds, government securities etc., in a dematerialised form. In contrast, a Trading account is required to buy or sell them. Demat account and Trading account look very similar, so for a beginner to understand and differentiate between them, it isn't easy.

To better understand this matter, let's take the example of Mohan, a shopkeeper who sells groceries. He buys the stock and stores it in his warehouse while selling his stocked items through his shop. He again buys more stock and keeps it in the warehouse to sell it later. Consider the warehouse the Demat account, in which you can store all the shares and securities, but in an electronic form. On the other hand, consider the shop as the Trading account where actual transactions take place.

Demat Account

Trading Account

You use it to store the purchased stocks and securities.

You use it to purchase and sell stocks and securities.

You can open it without buying any shares or securities, and it's not necessary to maintain balance in it at any point in time.

It is required to transfer the funds to and from the bank account linked with it to buy and sell various securities.

Your Demat account also protects you from those unpredictable debits and credits by providing you with the option of freezing it for the desired time length.


The Trading account keeps you aware of the markets' ups and downs as the experts' opinions get posted regularly. It even allows you to access it, no matter if the market is open or closed.

 When you possess a Demat account, you can convert the electronic form of stocks and securities into physical ones in very little time and vice versa.

Having a Trading account means having the ease and flexibility to trade through various stock exchanges and transfer the funds and equities hassle-free.  You can trade with the comfort of sitting at home or travelling because you can access the Trading account through various devices like phone, tablet, laptop or pc.

 It gives you the power to automatically get the benefits when a company or a firm distributes dividends, returns or interests, just by owning a Demat account.

On the other hand, a Trading account gives you access to all the stock exchanges throughout the country.


Fun Fact:

Did you know that you can get various loans against the securities you possess in your Demat account? Well, now you know!

At this point, having read the information given above, you are now able to differentiate between a Demat and a Trading account. But it is also worth knowing that these two accounts go hand in hand. A Trading account functions when you have a Demat account, whereas a Demat account will be of no use if you do not transact with a Trading account's help.  The Trading account plays the role of bridging the Demat account with a bank account, making Trading a smooth experience. All you need to do is have a bank account, open a Demat and Trading account, link the bank account with the Trading account and then the Trading account with the Demat account to start Trading in the stock market.


ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.The contents herein above 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. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product.

Most Popular

  • 25 Oct 2021
  • ICICI Securities

Why Gold is the Perfect Investment for You This Diwali

For ages, gold has been an integral part of the Indian tradition and is considered a symbol of luck, prosperity, and abundance. This festive season, it might be good to tweak the practice slightly by investing in digital gold products instead of coins, bars, or jewelry.

  • 21 Oct 2021
  • ICICI Securities

Why Liquidity Matters to an Options Trader?

Presently, there are 3 indices (Nifty, Banknifty and Nifty Financial Services) and 180 eligible stocks in F&O segments for the investor to trade. Each of the scrips is having its own lot size (Contract size) which is set by the NSE from time to time depending on the price its trading in the market.

  • 21 Oct 2021
  • ICICI Securities

Dynamic Management of the Delta Hedging

Hedging essentially means limiting risk on any asset class or a portfolio. Similarly, the concept of Delta hedging emerges in options trading which essentially mean to offset the losses in Stock by corresponding gain in option or vice versa.

  • 19 Oct 2021
  • ICICI Securities

Benefits of Forex and Currency Trading

The foreign exchange market is really big in terms of liquidity, accessibility and nature. It is possible to purchase and sell any currency over the counter.

  • 19 Oct 2021
  • ICICI Securities

Role of Commodity Market In India

Commodity markets have been around for several years now. However, it was only in 2003 that the regulators permitted exchange-traded mechanism. 

  • 19 Oct 2021
  • ICICI Securities

Things To Keep In Mind While Trading In Agri Commodity Futures

Agri commodity trading is one of the major attractions of the commodity market. Those who are keen to meet their long-term financial goals are particularly interested in agri commodity trading.

  • 19 Oct 2021
  • ICICI Securities

Types Of Foreign Exchange Market

The foreign exchange market, also known as the forex market, is a global marketplace for trading in currencies. 

  • 13 Oct 2021
  • ICICI Securities

10 Intraday Tips for Beginners

Beginning your intraday trading journey can be difficult without the right guidance. While every individual must conduct his own research and devise a unique trading strategy, here are some handy tips for beginners.

  • 13 Oct 2021
  • ICICI Securities

9 easy ways to save more and spend less

Whether you're finding it challenging to keep up with your monthly expenses, saving for a large purchase or waiting to take a much-needed family vacation sometime in the future, you need to start saving now to achieve your goals. Click here to read how these simple tips can help you spend less on things you don't need and SAVE more to strengthen your financial health.

  • 13 Oct 2021
  • ICICI Securities

8 inside secrets to getting rich that you don't know

What does it mean to be rich? Some rich folks would say it all boils down to hard work and success, but playing smart with money is a tip they may not divulge. Click here to read on the eight inside secrets to getting rich and staying that way.

Open an Account

Sign Up for Free


Please use the mobile no registered with Aadhaar.

OTP sent to +91 1234567890

Didn’t received OTP? Resend



Get Research Backed Recommendations.

Download The app now

or Scan below QR Code To download app