Home » Account Types » Demat Account » Difference Between Trading Account and Demat Account



A trading account is an investment account that holds securities, cash and other holdings like any brokerage account. With a trading account, an investor can buy and sell assets as frequently as they want, that too within the same trading session. Some of the key elements that differentiates a trading account from other investment accounts are – the level of trading activity, the purpose of the activity and the risk involved in the activity. Typically, holders of a trading account are involved in day trading and are often seen exercising long-term buy and hold strategies.

For this reason, you need a special account through which you can conduct transactions. This is called the trading account. Without one, you cannot trade in the stock markets. You register for an online trading account with a stock broker or a firm. Each account comes with a unique trading ID, which is used for conducting transactions.Also, each broker offers different trading account features. Read more about features of trading by Kotak Securities.


A trading account is used to place buy or sell orders in the stock market. The demat account is used as a bank where shares bought are deposited in, and where shares sold are taken from. Trading account with Kotak Securities helps you trade seamlessly in the stock market.

Example ( Trading account meaning and procedure)

You have Rs.100 in your wallet. You go to a shop and tell the seller that you want a packet of chips, you check the price, and finalize the transaction. Then, you take the money out of your wallet and give it to the seller. In this case, the wallet acts as the demat account, while you act as the trading account.


Just like the demat account, a trading account is a must for investing in the stock market. This is because to trade in the stock markets, you need to be registered with the stock exchange. Stock brokers are registered members of the exchanges. They traditionally conduct trades on your behalf.

Most often, stock broking firms have thousands of clients. It is not feasible to take physical orders from every client on time. So, to make this process seamless, it is advisable to open an online trading account. Using this trading account, you can place buy or sell orders either online or phone, which will automatically be directed to the exchange through the stock broker.

Steps to Open a Trading Account By Kotak Securities®


  • First, select the stock broker or firm. Ensure that the broker is good and will take your orders in a timely manner. Remember, time is of utmost importance in the stock market. Even a few minutes can change the market price of the stock. For this reason, ensure that you select a good broker.
  • Compare brokerage rates . Every broker charges you a certain fee for processing your orders. Some may charge more, some less.
  • Some give discounts on the basis of the amount of trades conducted. Take all this into account before opening an account. However, remember that it is not necessary to choose a broker who charges the lowest fees. Good quality brokerage services provided often may need higher-than-average charges.
  • Next, get in touch with the brokerage firm or broker and enquire about the account opening procedure. Often, the firm would send a representative to your house with the account opening form and the Know Your Client (KYC) form
  • Fill these two forms up. Submit along with two documents that serve as proof of your identity and address.
  • Your application will be verified either through an in-person check or on the phone, where you will be asked to divulge your personal details.
  • Once processed, you will be given your trading accounts details. Congrats, you will now be able to conduct trades in the stock market

Demat account vs Trading account: How to Buy Orders in Share Market


Step 1:

Link your trading and demat accounts. This way you won’t have to keep supplying your demat account details for every transaction.

Step 3:

The exchange will process your order. It will verify the details of the transaction, the market price, the availability of the shares in the market, and so on. It will also check the details of your demat account that is linked to your trading account. This is especially so in case of a sell order.

Step 2:

Place an order through your online trading account. This could be a market order, a limit or buy order, or an after-market order. If your brokerage allows you to place orders through the phone, then you will need to supply your trading account details.

Step 4:

Once the order is processed, the shares will be either deposited in or debited from your demat account.

Demat account


  • Nomination: Yes, nomination is possible. You can have a nominee of your choice by filling up the details in the account opening form. This enables the nominee to receive the securities after the death of the holder of the demat account.
  • Between DPs: Transfer of shares is possible between demat accounts held with different DPs. You need to fill the Delivery Instruction Slip Book (DIS) and submit the same to your DP for transferring your shares from another demat account. However, you need to check whether the central depositories are same or not (CDSL or NSDL). If both of them are different, then you need an INTER-Depository Instruction Slip (Inter DIS). If they are same, then you need an INTRA Depository Instruction Slip (Intra DIS).

    Do try to submit that DIS when the market is on. Then, the date of submission of DIS and date of execution of DIS would be the same. Otherwise, there may be a delay. You may also need to pay the broker some charges for the transfer.

    What Is Dematerialization

What next?

Congrats, now you know about the requisites for trading – demat and trading accounts. Now, let’s go one step further and understand how to open a trading account. click here .

To open a demat account with Kotak Securities, click here. You can also open a trading account with us. Just click here .

To open a demat account with Kotak Securities, click here .

You can also open a trading account with us. Just click here .

Article Pages
Best Demat Account Buy Mutual Fund without Demat Account Conclusion Of Demat Account
Convert Physical Shares To Demat Account Demat Account Opening Charges Demat Account
How To Close Demat Account Informative Report On Demat Account
Product Pages
Brokerage Charges Collateral Amount in Demat Account Demat Account Number
Documents Required for Demat Account How to Open Demat Account Use of Demat Account
What is Dematerialization Account Multiple Demat Account in India Link your Aadhar number with Demat account
Procedure for buying shares through a Demat account Difference Between Dematerialisation Vs. Rematerialisation demat account and its uses
What are bonus shares? Demat Account Benefits Of Dematerialization
FAQs Pages
Demat Account Profile Transfer Shares from Demat Account Demat Account Security Key
Transfer Shares to Demat NRI Account Demat Account Charges

How it helps
  • Use existing bank account
  • Convenience through partnerships
  • Kotak Securities support
Reach Us

浩方电竞 pc蛋蛋28下载手机版 pc28加拿大开奖详情及时 英雄联盟竞猜现场投注网 09电竞下注抽注官网 英雄联盟平台赛程