A trading account is what you use to place buy and sell orders on the exchange, while a demat account holds the shares you own in electronic form. They do two different jobs, and for regular share trading you usually need both, linked to your bank account.
What does each account do?
Think of three accounts working together:
- Bank account. Holds your money. You transfer funds from here into your trading account before you buy, and withdraw them back when you want the money out.
- Trading account, the account that transacts. It takes your order, sends it to the exchange, and executes the buy or sell.
- Demat account, short for dematerialised account. It stores the shares you own as electronic entries, the same way a bank account stores money. When you buy shares in Delivery, they're credited here; when you sell, they're debited from here.
So a trade flows like this: you move money from your bank account into your trading account, the trading account executes the order, and the shares land in (or leave) your demat account.
Do I need both to invest?
For buying and holding shares, yes. The trading account does the transaction and the demat account holds the result. On Rupeezy the two are opened together as a single combined account, and there's no option to take one without the other. See can I open a trading account without opening a demat account and how do I open an account with Rupeezy.
Where do I see my shares after I buy them?
The shares you buy and hold in Delivery show up in your Holdings, backed by your demat account. For how a buy reflects there, see what Delivery, Intraday, T+5 and Carryforward mean.
Things to keep in mind
- A demat account only holds securities. It doesn't place orders. A trading account only transacts. It doesn't store your shares.
- Intraday trades are squared off the same day and never reach your demat account; only Delivery shares are held there.
- Funding is manual; settlement is automatic. Your bank account is linked for transfers, not auto-debited, so you add funds to your trading account yourself before you buy. See how do I add funds to my account. Shares are different: once a Delivery trade settles, they're credited to or debited from your demat account without you doing anything.
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