The world of the stock market has always intrigued people looking for a highly rewarding investment option. With the Indian stock market expected to grow consistently Authentic Clayton Thorson Jersey , an increasing number of people are now looking to invest. However, to start investing, apart from the knowledge and skills, you will need two essential things- a Demat account and a trading account.
But aren't they both the same things? In this modern age when brokers are offering innovative products such as TCD (Trading-Cum-Demat) accounts, it is ubiquitous for many people to assume that a Demat and a Trading account are the same. While both these accounts are closely related Authentic Shareef Miller Jersey , there are some significant differences between the two.
Let us first have a look at what a Demat account is and then see how it is different from a Trading account.
What is a Demat Account?
A Demat account converts the physical shares into an electronic form. As a result, they are also known as dematerializing accounts. When you purchase shares, they are stored in your Demat account in an electronic form. Similarly, when you sell the shares, they are debited from this same account.
When you contact a broker to open a Demat account Authentic JJ Arcega-Whiteside Jersey , you are given a Demat account number for electronically settling your trades.
How is a Demat Account Different from a Trading Account?
There are three major differences between the two-
1. Functionality
The biggest difference between the two is their functionality. As mentioned above, a Demat account is where you hold the shares you have purchased. On the other hand, a trading account is from where you place your orders on an exchange. For instance, let us assume that you want to purchases 100 shares of a company. You will place the buy order from your trading account. Once the purchase has been made, the purchased shares would be deposited into your Demat account.
2. Nature
The next significant difference between the two is their nature. The Demat account can be thought of as a savings account you have in a bank. It is a storage facility for the shares you purchase and sell on the stock market.
A trading account works as an intermediary between your bank account and the Demat account. You can transfer funds from your bank account to your trading account to purchase shares. Similarly Authentic Miles Sanders Jersey , you can also withdraw funds from your trading account and deposit the same into your bank account.
3. Charges
The brokers charge AMC (Annual Maintenance Charges) even if you have an idle Demat account. There is also an additional fixed charge every time shares are debited from your Demat account.
There are generally no charges as such for maintaining a trading account. However, there are statutory charges such as STT, GST, exchange charges, turnover tax Authentic Andre Dillard Jersey , stamp duty, and others for executing transactions.
Opening a New Trading and Demat Account
Now that you know what is Demat account and how it is different from a trading account, it is time that you should start looking for a top stockbroker to get yourself a new trading and Demat account.
Make sure that you check the reputation, brokerage, trading platform Authentic Dallas Goedert Jersey , and other features offered by the broker to make your decision. If you are new to the stock market, it is better to start small to get a clear idea of how trading and Demat accounts work.
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Domain Migration With Ensuring SEO Efficiency ? An Insight! Web Hosting Articles | August 25, 2019
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