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  • What is Demat account?

    A Demat Account or Dematerialised Account provides the facility of holding
    shares and securities in an electronic format. During online trading, shares are
    bought and held in a Demat Account, thus, facilitating easy trade for the users.
    A Demat Account holds all the investments an individual makes in shares,
    government securities, exchange-traded funds, bonds and mutual funds in one
    place.

    Demat enabled the digitisation process of the Indian stock trading market and
    enforced better governance by SEBI. In addition, the Demat account reduced
    the risks of storing, theft, damage, and malpractices by storing securities in
    electronic format. It was first introduced in 1996 by NSE. Initially, the account
    opening process was manual, and it took investors several days to get it
    activated. Today, one can open a Demat account online in 5 mins. The
    end-to-end digital process has contributed to popularising Demat, which
    skyrocketed in the pandemic.

    Trading Account

    Similar to a bank account, a trading account acts as a common platform to sell or purchase
    securities. Securities are purchased through a trading account, held by opening a Demat
    account online, and payments are done through the linked bank account.