Understanding Demat and Trading account relationship

Some of the beginners to online stock trading do not understand relationship between Share Trading account and Demat Account . In this short article lets see the relationship between Demat account , Trading Account and your Bank Account . We will also see how many trading or Demat account you can have in total .

Work Flow

Below is a short chart where I have tried to give the flow when you buy a share . click to Enlarge

Demat Account : Account where your Shares are stored in electronic form .

Trading Account : An account which is used to place orders for Buying and Selling of shares .

So Trading account is an interface between your Bank account and your Demat account , when you buy something , Trading account takes money from your Bank Account (Its already taken from your Bank account and saved in Trading account) and buys shares and stores it in your Demat account . When you Sell something , Your trading account takes back the shares from your Demat account and Sells them in Stock Market and get back the money and that goes back to your Bank account (actually you manually transfer it to Bank account from Trading account most of the times .

Question : Does any one know maximum how many demat account can one open ?

If you Liked the post , Subscribe Here and get the posts directly in your Inbox

112 CommentsAdd Comment

  1. Aravind

    Good introduction for someone new to stock trading. One question I have is: is the Trading account mandatory? Is it possible for me to buy shares using money from Bank Account and place them in demat account, without the middleman (Trading account)?

    The reason I ask is, my Demat account is with Kotak Mahindra Bank, which is linked to a Bank Account also in Kotak Mahindra Bank. However, the Trading account is with Kotak Securities, and their service is horrible. I want to get rid of this Kotak Securities from the picture.

  2. Shekhar

    Which ITR form i need to file as i have only short term gain around 8000 for FY 2014-2015 (AY 2015-2016), or can i escape this income and does not show in ITR, as it is very very less in amount (just asking) as i have already closed my demat account as well.

  3. Thanmai

    Dear Sir,

    i am done trade= 0.07 paise in around 100000 Share but our Trader is charged me in around 35k as a broker charges.
    in my account some so the share are there but they are selled. now my account is showing – Imaginative balance now i can close my account. or what i need to do can u suggest me sir.


  4. Manjunath

    Hi All,

    I Open New Trading account and Demat account in my saving bank account, but the thinking is when i open the trading and Demat account i fail to read all details about Selling and Buying broker charges and later i know it the bank which i took the trading account and Demat account they are charges more, like each transaction they are charging Rs.15/- (Selling and buy) its too much deducted my account now i read all the details i know about little bit about Trading and Demat account broker charges what i am feeling now means i want keep my demat account same but i want change Trading account or need to take one more trading account in same demat account its possible ?

    Because when i asked my trading account help line they said like NO, in the website its mention we can open more den one trading account in the same demat account i want confirmation its ture or not..

    Please Suggest me

  5. Trideb

    can i have demat account of one company and trading account of other??? say, I have demat account of angel and trading account of SBICap and work in securities???

  6. radhika

    i have opened a DMAT account in axis bank.can u plz explain me how does trading work?how and wer u buy and sell

  7. Avinash

    Thanks Manish, I found it very useful. I have bookmarked ‘jagoinvestor.com’.
    I am new in this and started experimenting –
    I buy shares from sharekhan.com on my own and I can see them when I login to the account under portfolio. does it mean that I have trading + demat account with sharekhan?

  8. Thank YOU manishiji
    Per mera demat or trading Ac process meh
    Hai,meh jaynna chahta hua ki
    Day trading or delivery based trading
    Samjo ki mehne aaj Z company keh 100 share 100 keh bhav seh kharide or 1 gante bahd 102 price hoati hai toh meh bech dehta hua it mean intraday trading ,
    agerbajebaje tahk shkie ki price 99 hoa jahti hai, or meh bechta nahi toh yea automatically delivery based trading hoajahti hai yiaa kuch or system plz tell me!

  9. I read all comments,
    Meh yea jaynna chahta hua ki ,kya kisi bhi company keh share ki expiry date nirdharit hoati hai yiaa nahi ,like that icici ka share 2000 seh start hai ,per expiry date ???? of share

  10. santosh

    Hello sir
    I have demat, trading a/c in aditya birla money I had lost my money
    And I would like to close the demat a/c. can i close my account. thank you.

  11. Happyinvest007

    Hi Manish

    It was a nice article and came to know when I started searching for basic details on investment on stocks. Yes, I have now decided to start investing in Stock Market after my steady investment in mutual fund.

    Can you please hele here with my simple questions:

    1) I have saving account with ICICI bank and would like to open DMAT and trading account with them. Am I eligible for 3-in-1 account benifits, if any?

    2) I want to open DMAT and trading account with defferent DP other than ICICI (saving account with ICICI), is it practically feasible? Are there any constraint or inefficiency around this option.


  12. Deepa

    I am very new to the market and looking for both intraday and delivery trading including trading in commodities as well. Could anyone help me in deciding the best and cheap broker ..bank or dp to open a trading and demat account.
    I am getting confused after reading the reviews and unable to decide anything. Is it good to have 3-1 account for beginners in same bank or other way around I can choose..

Leave a Comment