Lesson 3 of 3 · 7 min
Demat and trading are not bank accounts
One holds your securities, one places the orders, and neither of them is where your money lives — plus the charges on a trade that nobody adds up.
Open a broking app and it signs you up for two accounts, not one, and never explains why they are separate. A DEMAT account holds shares and bonds electronically, in the same way a bank account holds money. It is maintained by a Depository Participant with either NSDL or CDSL behind it.
A TRADING account is the thing that places buy and sell orders. Your bank account funds it, the trading account transacts, and the demat account stores what you own. Three accounts, three jobs.
| Charge | Roughly what it is |
|---|---|
| Brokerage | Per trade, or a flat fee per order |
| Securities Transaction Tax | A small percentage on the trade value, and not deductible against your gain |
| Exchange and regulator fees | Small, per trade |
| GST | On brokerage and on some other charges |
| Stamp duty | On purchases |
| DP charges | A flat amount per scrip on the day you SELL, regardless of size |
| Annual maintenance | A yearly fee for keeping the demat account open |
Just for you
List every financial account in your name. Do you know which of them has a nominee recorded?
This stays in your browser and is never sent anywhere — not to us, not to anyone. It disappears when you leave the page.
Match them up
Six words the broker's app never explains
Pick a term, then pick what it actually means.
Pick a term on the left.
Check yourself
1 / 3
Kabir asks
Bank account, trading account, demat account. Which one holds what you own?
Done reading?
Saved in this browser — and finishes the course.