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The difference between a Demat account and trading account

Opening a Demat account is generally the first step, if you are someone looking to invest or trade in the share market. Demat accounts are online accounts which hold shares in electronic form. Earlier shares were issued in the form of physical documents and were kept securely to redeem at a later time. Now with the onset of latest technologies shares can be bought and sold online without having the need to keep anything physically.

Trading account is for those people who invest in shares or derivatives on a regular basis. A trading account facilitates the exchange of shares in an electronic form in your online account.

Both Demat and trading accounts can be managed online. You can place your buy and sell orders by accessing your online portal. The list is not small when it comes to selecting the Best Demat account in India. There are a lot of factors you have to keep in mind so you can increase your profits while trading. 

Some of the major things you should keep in mind before opening a Demat account are:
  • Brokerage costs: One of the basic things you must compare among various brokers is the brokerage cost that they charge from you. Many firms levy unnecessary charges on customers account. Make sure you have done complete research on the best brokerage firm for you.
  • Downtime and mobile apps: Another thing to check while finalizing your Demat account is the facility of mobile apps and less downtime of the trading software. Keeping the mobile app for your trading software gives you greater control and flexibility. You can place your orders on the move from anywhere.
  • Informational Services: Many companies offer value added services in the form of financial guidance. Some firms advise their customers about the good stocks available which could turn profitable in future.
  • Market presence: Avoid newly opened brokers as you can’t really depend on new players in the market. Your aim should be to find a popular and reasonable discount broker with a good market reputation. As a lot of things depend on the time of trade. Suppose you want to X shares of abc company but you are not able to buy it because of technical issues with your brokerage firm. Such a situation will result in a loss of opportunity and lessen the chance of being profitable in a trade. So, always go for a reputed broker.
These are some of the basic features you can compare different companies on. Share market is a wonderful place to make money; however, it is even a place to lose all you got. It is very important that you do your home work properly before entering into an investment or you might regret it later.
Risk is relatively high when you invest in the capital market. However, it rarely happens that you lose all your money. It is a perfect place to make a lot of money too, provided you have the desired qualities required to be a successful trader. Decisions made in hurry often make us regret things later. Therefore, always make well- thought, sound and researched decisions while making an investment.
The difference between a Demat account and trading account The difference between a Demat account and trading account Reviewed by Lokesh kumar on 9:55 AM Rating: 5