You can unbundle trading and demat accounts


It is important to understand that you will need to have capital in order to trade securities. You will need a dedicated securities wallet, a trading account, and a bank account to transfer and receive funds. It is common to believe that your broker will provide you with both a Demat and trading account. The terms are so interchangeable that they are often used interchangeably. They are however complementary concepts.

What's the difference between trading and Demat accounts?

Your trading account is your identity in the securities marketplace and allows you to buy and sell securities. It is vital to have a trading account at a registered brokerage that would execute trades for you in the online market.

Demat account is an abbreviation for a Dematerialised account. This account allows you to store securities and shares in electronic and intangible formats. There are two major Indian security depositories that supervise the issuing and storage of a Demat Account. They are the Central Depositories Services Limited and the National Securities Depository Limited.

You must link your trading account and your Demat account so that securities can be added to and cleared from your Demat account .

These are the current types of accounts that allow you to store and trade Securities:

  • 3 In 1 account:A3 in 1 account offers you the benefits of a Demat, trading and savings account all under one roof. The trading account is used to sell and purchase securities. Bank accounts are used for receipts and payments. The securities are then stored in Dematerialised form and cleared through the Demat account. These accounts are typically offered by banks.
  • 2 In 1 account:A2 in 1 is one of our most popular account options. This account can only be used to trade or store securities. It is a combination of a Demat and trading account. This account can be opened by discount brokerages in a bundle. To transfer funds, you can link any bank account that you have already to your trading account.
  • Unbundled accounts This account option allows you the freedom to seek out services from different providers, such as trading account or savings account. Unbundled accounts will require you to link them together. They are great for certain situations and can save you money.

Why not get an unbundled account?

In certain situations, an unbundled account is best. You can only receive securities for future use. If you plan to sell your security holdings, you should invest in a Demat account. You would save money and only pay for the trading account you actually use.

You may also consider a Demat account if your goal is to apply for an IPO or to hold shares for a long time.

It is a good idea for traders to have all three accounts connected at all times. If you trade in equity and spot the perfect opportunity to enter a trading position, you may decide to proceed only to find that your trading account is insufficiently funded. In such a situation, if your savings account is linked to your trading account, you are less likely not to miss such trades due to the volatility of market.

If you're an investor, however, it may be a good idea not to have a set of accounts that are all one. You can avoid paying for services that you don't intend to use. You also have the option to choose a later account, which will give you the best value for your money. You will not only be able to save money on what you use, but you also get the most out of your needs.

You can also link multiple Demat accounts to one trading account if you are the account holder. You can link one Demat account to multiple trading platforms in the same way.

Before signing up for an account, it is important to carefully review all charges. Many providers impose hidden fees and maintenance charges in order to offer lucrative account opening deals. It is important to consider the purpose and intent of the account before deciding on the best product or service that suits their needs. A Basic Service Demat Account is sufficient if you intend to hold shares less than Rs.2 Lakh. It also saves you money on maintenance and opening fees. A Basic Service Demat Account is free of any opening fees and charges only if you have Rs.50,000 or more.

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Documents required for opening Demat account

Features and Benefits of Demat Account

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Basics of Demat account

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